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Comverse Nabs NetCentrex for $164M

Cruising along the convergence trail, Comverse Inc. (Nasdaq: CNSI), a provider of billing and messaging platforms, is acquiring VOIP system vendor NetCentrex SA for $164 million in cash. (See Comverse Buying Netcentrex.)

Comverse will also pay out an additional sum up to $16 million if NetCentrex meets "certain financial targets" for fiscal 2006 and 2007.

Comverse CEO Zeev Bregman says, "NetCentrex complements our product portfolio, technology, and strategic direction." That strategy has had Comverse on the acquisition path in recent months. It acquired CSG’s Global Software and Services (GSS) division for $251 million last October to complement its prepaid billing capabilities with postpaid OSS. (See Convergence Drives Billing M&A.)

The NetCentrex acquisition, due to close by July 1, adds VOIP and fixed/mobile convergence capabilities that Comverse says will place it in the catbird seat as carriers deploy IMS for converged services.

Paris-based NetCentrex has been planning an IPO, but as Light Reading recently noted, the company has also been surrounded by talk that an acquisition would provide a faster exit strategy and that it was in discussions with a non-infrastructure buyer. (See IPOs & M&A: London Gossip.)

Back in September NetCentrex founder and CTO Olivier Hersent recognized the possibility of a sale in an interview with LRTV, saying, "A company like NetCentrex can either be eaten or eat... We are right now more in a position to eat."

The vendor has been picking up VOIP deals across Europe, with customers including Orange (NYSE: FTE), Tiscali SpA 's German unit, and several carriers in Eastern Europe. (See NetCentrex Hits 1M With FT, Tiscali Germany Uses NetCentrex, and VOIP Finds Home in Eastern Europe.) But it remains a relatively small player, with annual revenues of around $30 million. Despite using NetCentrex's VOIP gear, France Telecom went with big name Ericsson AB (Nasdaq: ERIC) for IMS. (See FT Picks Ericsson for IMS.)

It's worth noting rival French softswitch vendor Cirpack , which was on France Telecom's shortlist for the contract, was acquired last year by access equipment vendor Thomson S.A. (NYSE: TMS; Euronext Paris: 18453). (See Thomson Buys Cirpack, Reports Q1.)

Shares in Comverse were down $0.31 (1.27%) to $24.17 in late afternoon trading on Monday.

— Nicole Willing, Reporter, Light Reading

googol_byte 12/5/2012 | 3:57:53 AM
re: Comverse Nabs NetCentrex for $164M So the valuation is $164M for $50M in revenues. What are the implications for Broadsoft, who was rumored to be asking $300M from Lucent 18 months ago? According to LR, they are supposedly positioning for an IPO later this year, but is that realistic?

And what about Sylantro, who seemed to have tailed off dramatically during the past 12 months?

Is this deal a good sign for the VoIP sector or simply an indication that the multiples continue to contract?
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