Light Reading
Pays nearly $30 million for the mediation specialist, after a protracted courtship

Amdocs Buys Xacct (At Last)

Light Reading
News Analysis
Light Reading
12/22/2003
50%
50%

Billing giant Amdocs Ltd. (NYSE: DOX) finally splashed some cash on mediation system specialist Xacct Technologies Inc. today, hoping to bring itself up to snuff with its key competitors (see Amdocs Buys Xacct).

Amdocs is paying $13.5 million in cash and $16 million in stock for fellow Israeli firm Xacct, which has about 70 service provider customers and annual revenues believed to be upwards of $20 million. Xacct had raised $87 million in funding since its launch in 1997.

The deal has had little impact on Amdocs' share price, which currently stands at $22.30, down 16 cents, less than 1 percent, from Friday's closing price of $22.46.

And Amdocs is getting one of the best known mediation firms in the world for its money. In a recent Heavy Reading OSS market perception study (see Heavy Reading Takes on OSS), Xacct was ranked as the second most recognized name in the mediation market -- behind Hewlett-Packard Co. (NYSE: HPQ) -- with nearly 50 percent of operator executives with knowledge of that sector recognizing it as a player. Xacct was ranked third overall in the survey's mediation category once scores for price, performance, quality and reliability, and service and support were taken into account. It was beaten only by HP and Intec Systems Inc.

But while the price may not seem too high for an established OSS player, OSS Observer analyst Mark Basham thinks Amdocs could have paid less: "This was a distressed sale. Xacct has some good technology, but it has been cutting back its staff for a while and has been in financial difficulties for at least a year or so. I think Xacct's investors might have been pushing very hard to get some cash as part of the deal, and at that price it may be that someone might have been doing a friend a favor."

In the summer, Xacct claimed to have about 110 on staff, but it is unknown how many are left and making the move to Amdocs, and whether the company's headquarters and a development center in Santa Clara, Calif., and another R&D site in Tel Aviv, are to be retained. Amdocs had not responded to questions as this story was published.

Rumors have been rife for some time that the deal was about to close (see Amdocs, Xacct Diss Takeover Talk), and insiders had often leaked stories to the Israeli business press of teams of Amdocs executives roaming Xacct's corridors. Past reports had also alleged a series of offers from Amdocs, some citing hundreds of millions of dollars before the bubble burst, that had been rejected by Xacct's backers for being too low. Anyone for schadenfreude?

So why would Amdocs want Xacct anyway? Well, it gives the software and services firm its own mediation technology, something its main billing system rivals Convergys Corp. (NYSE: CVG) and CSG Systems International Inc. (Nasdaq: CSGS) already have. Each of the main billing system players has been building a broader range of technical capabilities around its core billing components for some time.

The move follows several other recent acquisitions in the mediation system sector (see Openet Buys Sepro for a Song and Intec Snaps Up Digiquant), and analysts such as Basham expect further consolidation in the OSS market.

— Ray Le Maistre, International Editor, Boardwatch

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
The New Wave of IP + Optical Integration

11|21|14   |   04:29   |   (7) comments


At the Alcatel-Lucent Technology Symposium, Heavy Reading senior analyst Sterling Perrin talks about how SDN has reshaped the discussion around packet and optical integration.
LRTV Huawei Video Resource Center
Huawei Highlights at BBWF 2014

11|20|14   |   3:40   |   (1) comment


Broadband World Forum is one of the world's largest telecoms, media and technology events with over 7,800 senior executives from across the globe converging on Amsterdam every year to identify the Next Big Thing. BBWF is an exciting place to meet the entire industry under one roof and identify the latest in network innovation, service optimization and customer ...
LRTV Huawei Video Resource Center
How Will BCMS Stimulate Margin for Broadband Operators?

11|19|14   |   6:52   |   (0) comments


In BBWF 2014, Liu Shuqing emphasizes the value of FMC 2.0 based full service experience by throwing light on the BCMS solution. The underlying principle of this innovative technique is to create network robustness and driving network from connection oriented to ACE – BAND oriented infrastructure, in which applications, cloud, and user experiences will be an asset ...
LRTV Huawei Video Resource Center
SingleFAN3.0: Better Connected Experience

11|19|14   |   3:06   |   (1) comment


At the BBWF 2014, David Hu, the VP of Huawei Access Network Product Line, talked about the future of access networks – SingleFAN3.0: faster broadband, wider coverage, and smarter connection.
LRTV Interviews
Basil Alwan Interview: The Road to Cloud

11|19|14   |   09:09   |   (0) comments


Alcatel-Lucent's head of IP and Transport talks about the migration towards a web-like networking environment, the impact of the cloud, SDN and NFV, and the yet-to-be-announced FP4 chip.
LRTV Documentaries
FairPoint Makes a Fair Point About Analytics

11|19|14   |   1:56   |   (1) comment


The US-based communication service provider gets to grips with advanced analytics, tackling data and breaking down the silos within its own business.
LRTV Documentaries
Analytics Lets C Spire Get to Know Subs

11|19|14   |   3:01   |   (2) comments


It's all about the data for US operator C Spire as it uses analytics to personalize its customer service down to individual subscribers.
LRTV Interviews
Nuage Branches Out With SDN: CEO Interview

11|17|14   |   9:32   |   (0) comments


Sunil Khandekar, CEO of Alcatel-Lucent's SDN-focused unit Nuage Networks, talks about the opportunities and challenges of breaking out of the data center into wide-area networks.
Light Reedy
Telecom Analytics Grows Up

11|14|14   |   1:15   |   (4) comments


The big data analytics debate has moved on from a year ago, with some experts suggesting it's no longer a technology challenge.
LRTV Huawei Video Resource Center
Huawei Compass

11|14|14   |   3:17   |   (1) comment


At OpenStack Summit 2014, Shuo Yang, Huawei Principal Cloud Infrastructure Architect introduced Huawei Compass, the software tool for solving customers' problems on the journey of OpenStack Cloud.
LRTV Huawei Video Resource Center
Huawei's Cloud Strategy in European Region

11|14|14   |   2:56   |   (1) comment


At OpenStack Summit 2014, Dr. Gotz, CTO of Huawei IT in European Region introduced Huawei's cloud strategy in European region.
LRTV Huawei Video Resource Center
Huawei's Contribution on OpenStack

11|14|14   |   5:58   |   (0) comments


At OpenStack Summit 2014, Dennis Gu, Huawei Chief Architect of Cloud Computing introduced the relationship between OpenStack and cloud computing, and Huawei's contribution on OpenStack.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Bell Labs Chief Slams 'Toy' Networks
Robert Clark, 11/19/2014
$38.3M: Ain't That a Kik in the SMS
Sarah Reedy, Senior Editor, 11/20/2014
Subsea Market Lures New Cast of Characters
Dan O'Shea, Managing Editor, 11/14/2014
The New Wave of IP + Optical Integration
Ray Le Maistre, Editor-in-chief, 11/21/2014
Google, AT&T, BT Unite on Network Data Models
Carol Wilson, Editor-at-large, 11/20/2014
Like Us on Facebook
Twitter Feed