Revenue assurance company cVidya has announced the completion of its $21 million acquisition of ECtel, which has $14 million in cash and cash equivalents. cVidya made the acquisition after raising $10 million from existing investors Carmel Ventures, StageOne, STAR Venture, Battery Ventures, Hyperion, and Oracle.
cVidya provides solutions designed to prevent revenue leakage from telephony and Internet providers. Its MoneyMap product finds lost charges, inaccurate pricing, and network equipment that is not generating revenue. The match with ECtel, which provides revenue management software, with an emphasis on solutions for finding and preventing fraud on communications networks, was put together at the beginning of 2009, when cVidya was considering how to continue growing.
"We had two options for growth: organically, with a following wind from the market, and non-organically, " says cVidya founder and CEO Alon Aginsky. "There is no doubt that, in retrospect, non-organic growth was the winning move, because we have doubled everything."
The doubling is mainly in the top line. ECtel had revenue of $13.2 million in the first three quarters of 2009, and was expected to finish the year with nearly $20 million revenue, a figure similar to that of cVidya.
The merged company will employ 280 people, 160 of them in Israel, exactly double cVidya's workforce before the acquisition. Aginsky says the merger process will include layoffs. "We are letting people go, but the number is low," he says. "I told the workers that this is a growth move, not a streamlining move. There is almost perfect synergy between the two companies. If the first two quarters of this year are positive, we'll be hiring."
Published by Globes [online], Israel business news - www.globes-online.com - on January 14, 2010
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