Amdocs Ltd. (NYSE: DOX) may be near its largest ever acquisition. "The Wall Street Journal" reports that Telcordia Technologies Inc., which is owned by private equity funds, is up for sale. The company's controlling shareholders want to sell it at a company value of $1-1.5 billion, and Amdocs is named as a possible buyer, alongside Hewlett Packard Co. (NYSE: HPQ), Oracle Corporation (Nasdaq: ORCL), and private equity funds.
Amdocs, run by CEO Eli Gelman, develops billing and CRM solutions for telecommunications carriers. New Jersey-based Telcordia is in the same business, providing software solutions for telecommunications carriers. Both companies provide enterprise operating support services (OSS).
"The Wall Street Journal" says that Telcordia owners Providence Equity Partners and Warburg Pincus have hired Credit Suisse to run the sale process. The paper says that an IPO is also being considered, but a person close to the process said that a sale is most likely.
Providence Equity Partners and Warburg Pincus acquired Telcordia from SAIC Inc. in 2004 for $1.35 billion in cash. As a private company Telcordia does not publis financial data, but "The Wall Street Journal" quotes a Moody's report as saying that the company posted $735 million in revenue in the 12 months ended on October 31, 2009.
Amdocs's largest acquisition to date was during the heady days of the high-tech bubble, when it acquired Solect Technology Group for $1 billion in shares in March 2000.
Amdocs currently has $1.42 billion in cash and cash equivalents. Amdocs's share closed at $28.84 on Friday, giving a market cap of $5.53 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 17, 2011
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