Platinum Equity LLC is currently the leading candidate to acquire Comverse Technology Inc. (Pink Sheets: CMVT). Platinum Equity submitted an offer of $9-10 per share, reflecting a company value of $1.85-2.05 billion, a premium of over 30% on the company's market cap. Comverse's share price closed at $7.14 on Wall Street on Friday, giving a market cap of $1.46 billion.
Goldman Sachs Group Inc. (NYSE: GS), which is handling the sale of Comverse, has been busy of late, and the list of potential buyers of the company is growing.
If a deal is closed, it will probably be in two parts: first the acquisition of Comverse Technology, immediately followed by the sale of Comverse Inc. - probably to Oracle Corporation (Nasdaq: ORCL), Comverse's main competitor in the billing solutions market.
Almost every major computer and telecommunications solutions developer has had the acquisition of Comverse units on its agenda for months. Potential buyers include Oracle, Hewlett Packard Co. (NYSE: HPQ), IBM Corporation (NYSE: IBM), and Huawei Technologies Co. Ltd. Israel's Amdocs Ltd. (NYSE: DOX) has shown interest in Comverse Inc., and NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) in rival Comverse Technologies subsidiary Verint Systems Inc. (Nasdaq: VRNT). However, from the outset, Comverse Technology has sought to be acquired as a whole, including all its subsidiaries: Comverse Inc., Verint, Ulticom Inc. (Pink Sheets: ULCM), and Starhome Inc.
Platinum Equity, founded by chairman Tom Gores in 1995, specializes in taking public companies private or selling off non-core businesses of companies. Therefore, acquiring the holding company Comverse Technology is more relevant than for other private equity companies.
Platinum Equity's access to Comverse Technology has been simplified after acquiring Ulticom, a US provider of solutions for landline and cellular networks, in September for $90 million. Comverse Technology's general shareholders meeting is due to approve the sale on Thursday. Platinum Equity will try to merge Ulticom with Covad Inc., which it acquired five years ago and now operates as a unit of Megapath Inc.
Comverse Technology's CEO is Andre Dahan.
Published by Globes [online], Israel business news - www.globes-online.com - on November 28, 2010
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