Neustar announces plan to split in two

Published June 21, 2016 by Veronica Garabelli

Another Virginia company has announced plans to split itself in two.

Sterling-based Neustar said Monday it intends to separate into two publicly traded companies. One company will consist of the majority of Neustar’s information services, and the other will focus on providing order management and numbering services.

The move follows other Virginia companies that have announced plans to split or merge in recent years, such as McLean-based news publisher Gannett, which separated its publishing and broadcast divisions last year. The broadcast and digital operation is now known as Tegna Inc.

“The proposed spin-off will enable Neustar shareholders to own and value each business separately, allowing each company to attract the investor base most appropriate for its distinct investment profile,” James Cullen, Neustar’s chairman of the board of directors, said in a statement.
 

Neustar plans to accomplish the separation through a tax-free spin-off.

Lisa Hook, currently president and chief executive officer of Neustar, will head the information services company, which will be re-branded. Paul Lalljie, Neustar’s senior vice president and chief financial officer, will lead the order management and numbering services company, which will retain the Neustar name and brand.

The information services company will provide marketing, security and related data services arising from millions of households and individuals, and the billions of devices that are constantly changing and interacting. It does not rely on any data derived from the company’s Order Management & Numbering Services activities, or NPAC Services.

The revenues associated with these services increased to $470 million in 2015, with a compounded annual growth rate of 25 percent during the past four years.

The order management and numbering services company will provide numbering and routing information to communications service providers to ensure the delivery of voice calls and text messages and efficient management of telephone number resources. It also will provide order and inventory management solutions that enable communications service providers to exchange information with other providers to support the provisioning of subscribers, services, networks and devices.

The revenues associated with these services increased to $580 million in 2015, with a compounded annual growth rate of 8 percent over the past four years.

NPAC fixed fee revenue will continue to generate approximately $496 million annually through the duration of the contract.

In addition, the existing members of the Neustar board of directors will move to the boards of each company as follows:

Joel Friedman will serve as chairman of the board of directors of the information services company and will be joined on the board by Paul Ballew, Mark Greene, Lisa Hook and Deborah Rieman.

James Cullen will serve as chairman of the board of directors of the order management and numbering services company and will be joined on the board by Ross Ireland, Paul Lacouture, Paul Lalljie, Michael Rowny and Hellene Runtagh.

Neustar says it will name additional board directors and the remaining senior leadership of each company in due course.

The separation is subject to customary conditions, including effectiveness of the Form 10 to be filed with the Securities and Exchange Commission, and approval by Neustar’s board of directors.