Comverse Technology, Inc. has announced that Comverse, Inc., a provider of software and systems enabling network-based multimedia enhanced communication and billing services, has signed an agreement to acquire the privately-held Netcentrex S.A., a developer of next generation voice and video solutions.

 

The agreement between the two companies represents roughly $164 million in cash, subject to certain adjustments and a contingent earn-out of potentially an additional $16 million. The actual amount of the contingent earn-out, if any, is determined by the achievement of certain financial targets by Netcentrex business during the remainder of fiscal 2006 and for fiscal 2007.

 

By offering Netcentrex’s network-based software that enables IP-based voice-video-data (triple-play) and FMC (fixed-mobile convergence) solutions for service providers with Comverse’s portfolio of value-added multimedia messaging, content and converged billing solutions, operators deploying differentiating, multimedia services in the VoIP and IMS (IP Multimedia Subsystem (News - Alert)) domains are expected to benefit.

 

Kobi Alexander, Chairman and CEO of Comverse Technology noted that his company believes that VoIP, FMC and IMS-based communication services are poised to grow in the coming years and that Netcentrex is well-positioned to address many of these opportunities. Together, the two companies offer a broad portfolio that enables converged voice-video-data solutions to serve wireless, fixed, cable, MVNO and Internet-based communication service providers.

 

Zeev Bregman, CEO of Comverse, the company’s network systems unit, contributed that Netcentrex complements Comverse’s product portfolio, technology and strategic direction. Their leading telco-grade application server, rich IP Centrex, Class 5 video services and proven market position (with over 2.8 million live VoIP lines) along with Comverse’s telecom VAS and billing leadership, create a synergetic, unique VoIP, FMC and IMS offering.

Netcentrex is delighted to be joining forces with Comverse, according to Olivier Hersent, Chairman and CTO of Netcentrex. The combined expertise of the two companies will benefit both existing and new clients, and will allow all types of operators to build innovative service bundles based on IP applications.

Comverse will gain from Netcentrex a broad suite of software-based converged voice-video-data-over-IP solutions that support the consumer and enterprise offerings of approximately 50 service providers, including AOL Germany, Comunitel (Tele2), Fastweb, France Telecom, Telefonica Deutschland GmbH and Tiscali.

Paris-based Netcentrex produced revenues of approximately $50 million for the year ending December 31, 2005. The acquisition is expected to close by July 1, 2006 and is anticipated to be neutral to the company’s fiscal 2006 pro forma net income. This income excludes the impact of purchasing accounting adjustments related to the write-down of deferred revenue, amortization of intangibles and other acquisition-related costs. The acquisition is subject to a number of standard closing conditions.

In this new era of intense focus on providing the utmost in customer service and performance, the combination of Comverse and Netcentrex makes sense for not only these two companies but also for the operators who will benefit from their paired offerings.

 

While Netcentrex is small and produces relatively small revenues comparable to the industry, its performance is strong and market share can only grow once combined with Comverse’s communications portfolio.

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Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.