NeuStar, Inc. (NYSE:NSR)


A class action has been commenced on behalf of owners of NeuStar, Inc. (“NeuStar”) (NYSE:NSR) common stock as of January 30, 2017 (the “Class”), the record date for determination of stockholders entitled to notice of and to vote upon a proposal to adopt the Merger Agreement, as defined herein.

The complaint charges NeuStar and certain of its officers and directors with violations of the Securities Exchange Act of 1934. NeuStar is a company comprised of two main parts: cellular services and corporate cloud-based services. As part of the cellular services segment, NeuStar is currently the Local Number Portability Administrator (“LNPA”) and has managed the Number Portability Administration Center (“NPAC”) under contract for the U.S. Government (the “NPAC Contract”) since number portability became possible nearly 20 years ago. Number portability allows telephone customers to retain their phone number if they switch telephone service providers. The NPAC Contract was non-renewed, and the Federal Communications Commission (“FCC”) engaged another firm to build a replacement platform to service this need in the future. NeuStar will continue to service the NPAC Contract under the old terms until the cutover to the new system occurs.

On December 14, 2016, NeuStar and Golden Gate Private Equity, Inc. (“Golden Gate”) executed a merger agreement (the “Merger Agreement”) pursuant to which NeuStar agreed to be acquired by Golden Gate for $33.50 per share in cash (the “Transaction”). On March 14, 2017, a majority of NeuStar shareholders voted to approve the Transaction, and on August 8, 2017, the Transaction closed. At issue is: (1) the valuation of the NPAC Contract based on how its cash flows were modeled into NeuStar’s management’s forecasts; and (2) whether NeuStar’s Board of Directors adequately informed shareholders when it disclosed an estimated transition date for the NPAC Contract of September 30, 2018 in the proxy statement filed with the SEC in connection with the Transaction, which, plaintiff alleges, was materially false and misleading.

Unbeknownst to shareholders, NeuStar knew that the NPAC Contract would not terminate by September 30, 2018. Specifically, NeuStar represented to the FCC a projected transition completion date sharply at odds with the expected transition completion date of September 30, 2018. On at least two separate occasions, NeuStar expressed concern that completion of the LNPA transition would be seriously delayed and would not be completed until “sometime in 2019,” and that even “2019 might be optimistic.” Without this material information, NeuStar stockholders were unable to properly analyze the adequacy of the merger consideration and/or whether or not to vote in favor of the Transaction.

If you are a current shareholder and would like to discuss your options of exercising your rights as a shareholder, which include ensuring that the company is getting the highest possible price for the company, and that the board of directors will act in the best interest of the shareholders, please contact us.

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