Private equity firm Apollo Global Management LLC (APO.N) is in advanced negotiations to acquire U.S. telephone conferencing services provider West Corp (WSTC.O), people familiar with the matter said on Thursday.
The deal would mark the second time West Corp has become a private company in a little more than a decade. It went public in 2013 and its shares are down by a quarter from their highs in March 2015, amid concerns over the company's competitiveness.
Apollo has prevailed in an auction for West Corp, although negotiations will continue for days and they could still end without a deal having been agreed, the sources said.
The price Apollo was offering could not be learned, although the sources said West Corp's indebtedness of more than $3 billion (£2.32 billion) weighed on the deal negotiations.
The sources asked not to be identified because the matter is confidential. Representatives for Apollo and West Corp declined to comment.
West Corp shares rose as much as 13 percent on the news, and ended trading up 6.4 percent at $26.91 in New York on Thursday, giving the company a market capitalization of close to $2.3 billion.
Omaha, Nebraska-based West Corp offers technology that allows companies and public safety organizations to launch teleconferencing sessions and manage customer service calls.
Call centre vendors and services firms have been consolidating to gain scale and adapt amid fast technological change and pricing pressure.
Genesys Telecommunications Laboratories Inc, a U.S. provider of call centre software owned by Permira Advisers LLP and Hellman & Friedman LLC, agreed to acquire call centre software maker Interactive Intelligence last year for $1.4 billion.
West Corp's revenue was about flat in the fourth quarter of 2016 at $567.4 million, and its quarterly operating income was $102.7 million, which was down 2.2 percent from the year-earlier quarter.
Private equity firms Thomas H. Lee Partners LP and Quadrangle Group LLC owned 21.5 percent and 4.5 percent of West Corp, respectively, as of March 23, according to a regulatory filing. This is the legacy of their taking the company private in 2006 for $4.1 billion, including debt. They then took West Corp public four years ago and sold down much of their stakes.
Thomas H. Lee declined to comment, while Quadrangle Group did not respond to a request for comment.
West Corp announced last November that it had hired investment bank Centerview Partners LLC and law firm Sidley Austin LLP to help it explore financial and strategic alternatives.
(Reporting by Greg Roumeliotis in New York; Additional reporting by Liana B. Baker in San Franscisco; Editing by Frances Kerry and Edmund Klamann)