INTELIQUENT, INC. (NASDAQ:IQNT) Files An 8-K Other Events

INTELIQUENT, INC. (NASDAQ:IQNT) Files An 8-K Other Events

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Item8.01.

Other Events.

This Form 8-K is being filed in connection with certain
litigation concerning, among other things, the Agreement and Plan
of Merger, dated November2, 2016, by and among Inteliquent, Inc.
(the Company), Onvoy Igloo Merger Sub, Inc. (Merger Sub) and
Onvoy, LLC (Parent) (the Merger Agreement). Parent and Merger Sub
are affiliates of the private equity investment firm GTCR, LLC
(GTCR). to the Merger Agreement, Merger Sub will be merged with
and into the Company (the merger) with the Company surviving the
merger as a wholly-owned subsidiary of the Parent.

As previously disclosed in the definitive proxy statement filed
with the Securities and Exchange Commission (the SEC) by the
Company on December14, 2016 (the Definitive Proxy Statement), a
putative class action lawsuit challenging the proposed merger was
filed on behalf of Company stockholders in the United States
District Court for the Northern District of Illinois. The action
is captioned Lon v. Inteliquent, Inc., et al., Case
No.1:16-cv-11244 (N.D. Ill.). Subsequent to the filing of the
Definitive Proxy Statement, two additional putative class action
lawsuits challenging the proposed merger were filed on behalf of
Company stockholders in the United States District Court for the
Northern District of Illinois. These actions are captioned
Wiesenfeld v. Inteliquent, Inc., et al., Case
No.1:16-cv-11392 (N.D. Ill.) and Schwartz v. Inteliquent,
Inc., et al.
, Case No.1:16-cv-11494 (N.D. Ill.). These three
actions were consolidated on January5, 2017.

The plaintiffs in the consolidated action allege that the
Companys preliminary proxy statement (the Preliminary Proxy
Statement) filed with the SEC on December2, 2016 and the
Definitive Proxy Statement omitted material information regarding
the merger, rendering them false and misleading. The plaintiffs
allege, among other things, that the Definitive Proxy Statement
omits certain information relating to communications concerning
post-merger employment opportunities for the Companys directors
and officers, the Companys financial projections, the financial
analyses performed by the Companys financial advisor and the
results of the Companys go-shop process.

The defendants named in the consolidated action deny all
liability with respect to the facts and claims alleged in the
consolidated action and specifically deny that any further
disclosure is required to supplement the Definitive Proxy
Statement under any applicable rule, statute, regulation or law.
Nonetheless, the Company has determined to supplement the
Definitive Proxy Statement with the disclosures set forth below.
In making these supplemental disclosures, the Company and its
Board of Directors do not in any way admit the factual or legal
allegations in the consolidated action and further reserve all of
their rights and defenses with respect thereto.

The supplemental disclosures will not affect the merger
consideration to be paid to stockholders of the Company in
connection with the proposed merger or the timing of the special
meeting of stockholders of the Company scheduled for Tuesday,
January17, 2017 at 10:00 a.m. Central Standard Time in The
Superior Room at The Conference CenterOne North Wacker, which is
located at One North Wacker Drive, 2nd Floor, Chicago, IL 60606
to vote upon a proposal to adopt the merger agreement.


SUPPLEMENT TO DEFINITIVE PROXY STATEMENT

In connection with the outstanding stockholder lawsuits in
the United States District Court for the Northern District of
Illinois as described in this Current Report on Form 8-K, the
Company has agreed to make these supplemental disclosures to the
Definitive Proxy Statement. This supplemental information should
be read in conjunction with the Definitive Proxy Statement, which
should be read in its entirety. Page references in the below
disclosures are to the Definitive Proxy Statement, and defined
terms used but not defined herein have the meanings set forth in
the Definitive Proxy Statement.


* * *

The following disclosure is added at the end of the fourth
paragraph on page 38 of the Definitive Proxy Statement under the
caption Background of the Merger and between the second and third
sentences of the fifth bullet on page 39 of the Definitive Proxy
Statement
:

One of the participants contacted by the Company and its advisors
during the go shop period received but did not execute a
non-disclosure agreement. None of the other 42 participants
contacted by the Company and its advisors during the go shop
period requested or entered into a non-disclosure agreement with
the Company.

The following disclosure replaces the last paragraph on page
45 of the Definitive Proxy Statement under the caption Opinion of
the Companys Financial AdvisorValuation AnalysesSum-of-the-Parts
Discounted Cash Flow Analysis
:

Sum-of-the-Parts Discounted Cash Flow Analysis. Perella
Weinberg Partners performed a discounted cash flow analysis of
the Company on a sum-of-the-parts basis, separately conducting a
discounted cash flow analysis of Inteliquents core business and
Inteliquents Next Gen business. Discounted cash flow analysis is
a valuation methodology used to derive a valuation of a company
by calculating the present value of its estimated future
unlevered free cash flows (calculated, beginning with net
operating profit after tax as set forth in the Company Forecasts,
by adding back depreciation and amortization, subtracting capital
expenditures and adjusting for changes in working capital).
Present value refers to the current value of future unlevered
free cash flows or amounts and is obtained by discounting those
future unlevered free cash flows or amounts to a specific point
in time by a discount rate that takes into account macroeconomic
assumptions and estimates of risk, the opportunity cost of
capital, capital structure, income taxes, expected returns and
other appropriate factors.

The following disclosure replaces the first four paragraphs
on page 46 of the Definitive Proxy Statement under the caption
Opinion of the Companys Financial AdvisorValuation
AnalysesSum-of-the-Parts Discounted Cash Flow Analysis
:

For each of Inteliquents core business and Inteliquents Next Gen
business, Perella Weinberg Partners calculated the implied
enterprise value as the sum of (i)the net present value of
Company senior managements estimated future unlevered free cash
flows of such business during the six months ending December31,
2016 and during the complete calendar years 2017 through 2021, as
included in the Company Forecasts, and (ii)the net present value
of the terminal value of such business at the end of calendar
year 2021.

For Inteliquents core business, Perella Weinberg Partners
calculated the terminal value by applying a perpetual growth rate
range of (0.50%) 0.50% to Company senior managements estimated
future unlevered free cash flows of Inteliquents core business
for calendar year 2021. Such perpetual growth rates were selected
based on Perella Weinberg Partners understanding of the business
of Inteliquents core business based on discussions with Company
senior management. Perella Weinberg Partners then calculated the
net present values of the future unlevered free cash flows and
terminal value of Inteliquents core business by applying a
discount rate range of 7.75% 8.75% (which was selected based upon
an analysis of the weighted average cost of capital of
Inteliquents core business calculated using the capital asset
pricing model), yielding an enterprise value range of
approximately $288 million to $354 million for Inteliquents core
business.

For Inteliquents Next Gen business, Perella Weinberg Partners
calculated the terminal value by applying an exit multiple range
of 8.0x to 12.0x to Company senior managements estimated EBITDA
of Inteliquents Next Gen business for calendar year 2021. Such
exit multiples were selected based upon Perella Weinberg Partners
professional judgment of appropriate valuation multiples for
Inteliquents Next Gen business, taking into account Company
senior managements expectations as to the future growth and
profitability of Inteliquents Next Gen business. Perella Weinberg
Partners then calculated the net present values of the future
unlevered free cash flows and terminal value of Inteliquents Next
Gen business by applying a discount rate range of 15.00% 20.00%
(which was selected based upon Perella Weinberg Partners
professional judgment taking into account an estimated cost of
capital for an early stage business of the Next Gen businesss
nature in light of its affiliation with and support from
Inteliquents core business), yielding an enterprise value range
of approximately $66 million to $129 million for Inteliquents
Next Gen business.

Perella Weinberg Partners then calculated the implied equity
value range of the Company by adding (i)the enterprise value
range of each of Inteliquents Core business and Inteliquents Next
Gen business and (ii)the Companys net cash amount of
approximately $120 million as of June30, 2016per Company senior
managements guidance. From this analysis, Perella Weinberg
Partners derived an indicative implied price per share range for
shares of Inteliquent common stock, as compared to the merger
consideration as set forth in the following table:

The following disclosure replaces the first full paragraph on
page 49 of the Definitive Proxy Statement under the caption
Certain Prospective Financial Information
:

The Company Forecasts and the Preliminary Projections were made
available to the Board and Perella Weinberg Partners subsequent
to the non-binding indication of interest by GTCR and Onvoy. The
Preliminary Projections had initially been provided to the Board.
Thereafter, on October31, 2016, the Board received the Company
Forecasts, which were used and relied upon by Perella Weinberg
Partners in connection with its financial analyses for its
opinion. A version of the Preliminary Projections and the Company
Forecasts, in each case for fiscal years 2016 and 2017 only, were
also provided to Parent in connection with its consideration of
the potential transaction. For these reasons, Inteliquent has
elected to summarize the Company Forecasts and the Preliminary
Projections in this proxy statement.

The following tables replace the first table following the
first paragraph on page 51 of the Definitive Proxy Statement
under the caption Certain Prospective Financial Information:


Company Forecasts


6MonthsEnding
December31,2016

Fiscal Year Ending December31,
Inteliquent Core
2017E

2018E

2019E

2020E

2021E


Revenue

$192 $387 $374 $371 $376 $381


EBITDA (1)

$40 $75 $67 $60 $59 $58


Less: Depreciation Amortization

(5 ) (11 ) (13 ) (15 ) (16 ) (20 )


EBIT

$35 $63 $53 $46 $43 $38


Less: Taxes (2)

(13 ) (24 ) (21 ) (18 ) (16 ) (15 )


Net Operating Profit After Tax

$22 $39 $33 $28 $26 $23


Plus: Depreciation Amortization


Less: Capital Expenditures

(14 ) (21 ) (20 ) (18 ) (17 ) (15 )


Less: Change in Net Working Capital

(4 ) (1 ) (3 ) (3 )


Unlevered Free Cash Flow

$12 $31 $23 $24 $23 $25


6MonthsEnding
December31,2016

Fiscal Year Ending December31,
Inteliquent Next Gen
2017E

2018E

2019E

2020E

2021E


Revenue

$5 $31 $47 $65 $88 $104


EBITDA (1)

($2 ) ($1 ) $3 $9 $17 $24


Less: Depreciation Amortization

(1 ) (3 ) (5 ) (6 ) (7 )


EBIT

($2 ) ($3 ) $4 $12 $17


Plus/(Less): Taxes (2)

(2 ) (5 ) (7 )


Net Operating Profit After Tax

($1 ) ($2 ) $3 $7 $11


Plus: Depreciation Amortization


Less: Capital Expenditures

(2 ) (5 ) (5 ) (7 ) (8 ) (9 )


Less: Change in Net Working Capital

(1 ) (1 )


Unlevered Free Cash Flow

($3 ) ($5 ) ($3 ) $4 $7


EstimatedFiscalYearEnding
December31, 2016


EBITDA (1)


Inteliquent Core Inteliquent Next Gen

$74

Note: Dollars in millions; rounded to the nearest million.


(1)
EBITDA is defined as net income before (a)interest expense,
(b)net income tax expense and (c)depreciation and
amortization.

(2)
Based on an assumed tax rate of 38.5%.

Important Information and Where to Find It

In connection with the proposed transaction contemplated by the
Agreement and Plan of Merger, dated November2, 2016, by and among
the Company, Onvoy Igloo Merger Sub, Inc. and Onvoy, LLC (the
Merger Agreement), the Company filed with the Securities and
Exchange Commission (the SEC) a definitive proxy statement and
other documents relating to the proposed transaction, including a
form of proxy card, on December14, 2016. Mailing of the
definitive proxy statement to the Companys stockholders commenced
on December14, 2016. BEFORE MAKING ANY VOTING DECISION, THE
COMPANYS STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT CAREFULLY IN ITS ENTIRETY AND ANY OTHER DOCUMENTS TO BE
FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR
INCORPORATED BY REFERENCE INTO THE DEFINITIVE PROXY STATEMENT (IF
ANY) BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED
TRANSACTION. Investors and stockholders may obtain a free copy of
documents filed by the Company with the SEC at the SECs website
at http://www.sec.gov. In addition, investors and stockholders
may obtain a free copy of the Companys filings with the SEC at
the Companys website at http://ir.inteliquent.com/sec.cfm or by
directing a written request to: Inteliquent, Inc., 550 West Adams
Street, Suite 900, Chicago, Illinois 60661, Attn: Investor
Relations.

The Company and certain of its directors, executive officers, and
certain other members of management and employees of the Company
may be deemed to be participants in the solicitation of proxies
from stockholders of the Company in favor of the proposed
transaction. Information about directors and executive officers
of the Company is set forth in the proxy statement for the
Companys 2016 annual meeting of stockholders, as filed with the
SEC on Schedule 14A on April8, 2016. Additional information
regarding these individuals and other persons who may be deemed
to be participants in the solicitation of proxies, as well as any
direct or indirect interests they may have in the proposed
transaction, is included in the definitive proxy statement with
respect to the proposed transaction and any other relevant
documents the Company has filed with the SEC.

Forward Looking Statements

Statements herein regarding the proposed transaction contemplated
by the Merger Agreement, future financial and operating results,
benefits and synergies of the transaction, future opportunities
for the companies and any other statements about future
expectations and the intent of any parties about future actions
constitute forward-looking statements as defined in the federal
securities laws. Forward-looking statements may be identified by
words such as believe, expects, anticipates, projects, intends,
should, estimates or similar expressions. Such statements are
based upon current beliefs, expectations and assumptions and are
subject to significant risks and uncertainties. There are a
number of important factors that could cause actual results or
events to differ materially from those indicated by such
forward-looking statements, including: (1)conditions to the
closing of the transaction may not be satisfied; (2)the
transaction may involve unexpected costs, liabilities or delays;
(3)the business of the Company may suffer as a result of
uncertainty surrounding the transaction; (4)the outcome of any
legal proceedings related to the transaction; (5)the Company may
be adversely affected by other economic, business, and/or
competitive factors; (6)the occurrence of any event, change or
other circumstances that could give rise to the termination of
the Merger Agreement; (7)the ability to recognize benefits of the
transaction; (8)risks that the transaction disrupts current plans
and operations and the potential difficulties in employee
retention as a result of the transaction; and (9)other risks to
consummation of the transaction, including the risk that the
transaction will not be consummated within the expected time
period or at all. If the transaction is consummated, stockholders
unaffiliated with the proposed transaction will cease to have any
equity interest in the Company and will have no right to
participate in its earnings and future growth. The foregoing
review of important factors should not be construed as exhaustive
and should be read in conjunction with statements that are
included herein and in the Companys filings with the SEC,
including its Annual Report on Form 10-K for the year ended
December31, 2015, which are available on the SECs website at
http://www.sec.gov. The Company believes these forward-looking
statements are reasonable; however, undue reliance should not be
placed on any forward-looking statements, which are based on
current expectations. All written and oral forward-looking
statements attributable to the Company, Onvoy or the

Sponsors (as defined in the Merger Agreement) or persons acting
on any of their behalf are qualified in their entirety by these
cautionary statements. Further, forward-looking statements speak
only as of the date they are made, and the Company, Onvoy and the
Sponsors hereby disclaim any obligation to update or revise
forward-looking statements as a result of developments occurring
after the date hereof unless required by law. Past financial or
operating performance are not necessarily reliable indicators of
future performance and you should not use our historical
performance to anticipate results or future period trends.


About INTELIQUENT, INC. (NASDAQ:IQNT)

Inteliquent, Inc. is a provider of voice telecommunications services primarily on a wholesale basis. The Company offers its services using an all-Internet Protocol (IP) network, which enables to deliver connectivity for a range of media, including voice, and data and video. The Company’s solutions enable carriers and other providers to deliver voice traffic or other services where they do not have their own network. These solutions are called off-net services. It also provides solutions to customers, such as over-the-top (OTT) providers. The Company offers a range of services, including Local Transit Service, Long Distance Service, Switched Access Service, International Voice Service, Direct Inward Dialing Service and 8XX (Toll-Free) Service. The Company offers an alternative to facilitate the exchange of local traffic between various carriers by using its tandem switches instead of the Incumbent Local Exchange Carriers’ (ILECs’) tandems or direct connects.

INTELIQUENT, INC. (NASDAQ:IQNT) Recent Trading Information

INTELIQUENT, INC. (NASDAQ:IQNT) closed its last trading session up +0.02 at 22.85 with 338,552 shares trading hands.

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