VoIP Systems

Dialogic Grabs Veraz

Dialogic Corp. (Nasdaq: DLGC) is getting deeper into the service provider IT (SPIT) sector by absorbing Veraz Networks Inc. (Nasdaq: VRAZ), as the companies announced today.

The deal is being described as a merger, but it looks more like Dialogic acquiring Veraz. Veraz will issue shares to Dialogic shareholders, such that the combined company would be 70 percent owned by Dialogic shareholders and 30 percent by Veraz's stakeholders.

The companies didn't estimate a dollar value for the deal, but it's not enormous; Veraz's market capitalization is around $44.6 million. More details might emerge when the companies host a conference call tomorrow morning. (If they'd held the call tonight, they'd have conflicted with Cisco Systems Inc. (Nasdaq: CSCO) earnings -- which would be a bad ratings move.)

The combined company will keep the Dialogic name, with Dialogic CEO Nick Jensen as chief executive. Veraz's CEO, Doug Sabella, would become president and chief operating officer.

The deal would also buy privately held Dialogic a spot on the Nasdaq, through Veraz's listing.

Dialogic sells an array of cards, gateways, and software for multimedia and signaling -- things like IP media servers, SS7 signaling boards, and host media processors. The company also offers AdvancedTCA (ATCA) platforms for building voice and video gear.

Much of Veraz's business has involved voice traffic: VoIP softswitches and session border controllers, for example. It's also gotten into bandwidth optimization, selling media gateways and equipment for voice compression.

Veraz also has a foot in the Service Provider Information Technology (SPIT) sector, selling software for IMS applications. It's part of a larger next-generation voice switching package that includes the ControlSwitch line of call-control software. With these products, Veraz could be slotted into the category of service brokers, an area related to service delivery platforms. (See The SPIT Manifesto.)

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 4:36:26 PM
re: Dialogic Grabs Veraz

Veraz tells us that Dialogic would end up with around 110 million Veraz shares in this deal.  So with Veraz closing at $1.01 Wednesday, you could say the deal is a transaction valued at around $111.1 million.

digits 12/5/2012 | 4:36:25 PM
re: Dialogic Grabs Veraz

The VOIP gear sector looks like it is becoming increasingly brutal... of the small/mid-sized vendors only Acme Packet appears to be unscathed. 

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