Lumine beats Skyvera with $32.25M bid for Casa's wireless business

After more than ten rounds of bidding, Lumine Group walked away with the top bid of $32.25 million for Casa Systems' wireless business. Skyvera quit bidding for the company after making a $32 million offer.

Now, Lumine's new deal for Casa's wireless business will go to a Delaware bankruptcy court for approval.

Lumine's victory likely comes as a relief to Verizon, Casa's top wireless customer. As Light Reading previously reported, a Verizon representative said this week that the company was "very comfortable" with the idea of Lumine winning the auction for Casa. But the Verizon representative said the company was uncomfortable with the idea of having to work with Skyvera if Skyvera won the auction. Verizon expressed its reservations to Skyvera, according to the representative. But Skyvera pursued the business anyway.

The events of the past week have cost Lumine dearly. Casa's initial bankruptcy plan, filed earlier this month, had Casa selling its wireless business to Lumine for $15 million.

But that was before Skyvera made a surprise $18 million bid for Casa's wireless business earlier this week.

An auction between Skyvera and Lumine occurred on Thursday. Lumine emerged as the high bidder. Thus, now Lumine will pay $17.25 million more than it had initially intended for Casa's wireless business.

A troubled road

Casa Systems got into the wireless industry in 2016, eventually investing $130 million into the effort. In April 2022, Verizon bought 9.9% of Casa's equity for almost $40 million. Casa provides Verizon with multi-access edge computing (MEC) services that essentially allow Verizon's private wireless enterprise customers to put a version of Verizon's core network directly onto their corporate campus. Verizon today accounts for 80% of the revenues in Casa's wireless business.

But Casa struggled to gain traction beyond Verizon. By September 2023, Casa listed $262 million in assets and $316 million in debt, with Verizon and private equity firm Summit Partners among its biggest investors.

After Casa filed for bankruptcy earlier this month, a fight emerged between Lumine and Skyvera for Casa's wireless business. Both companies have steadily been acquiring stressed companies in the telecom industry. Since last year, Lumine has purchased Openwave, RazorFlow, SpatialNetworX, WideOrbit, Titan.ium, Nokia's device and service management platform business, and Synchronoss Technologies' messaging and network logistics businesses. Skyvera has purchased STL and Kandy.

Lumine is a Canadian company that has been buying businesses since 2013. Skyvera, meanwhile, emerged in 2021 to operate the telecom software companies that TelcoDR acquires. The "DR" in TelcoDR stands for Danielle Royston, the company's founder and CEO. Royston's main source of funding appears to be Joseph Liemandt's ESW Capital.

According to recent filings in Casa's bankruptcy process, the company's wireless business consumes roughly $900,000 per week. The sale of the business will finance an auction of Casa's cable business, scheduled to happen in May.