ECI, whose share has slid to $24.4 since the publication of its Q2 financial statements, today announced that its fully owned subsidiary ECtel, was expected to raise $45 million this month, at a company value of $230 million.
Yet even this piece of good news has failed to inject life into ECI’s share, which, following the announcement, rose only 4% on medium turnover when Wall Street trading opened today at 15:30 Israel time.
ECtel’s issue will be led by Hambrecht & Quist and Salomon Smith Barney. The company will issue 3.5 million shares at $12-14 per unit, which implies raising $42-49 million. If the issue goes through ECI will post a $30 million capital gain.
ECtel had sales of $29 million in 1998, and grew at an annual rate of 50%. ECtel develops and markets products that enable telecommunication service providers to monitor the quality of service over their networks, detect and prevent telecommunications fraud, such as cellular fraud and calling card fraud, and bill for traffic that is transported across their networks by other service providers (interconnect billing).
ECtel’s customers include telecommunication companies such as Deutsche Telekom, MCI, British Telecom, Pele-Phone and others.
ECI officials estimate that ECtel, which employs 200 people, has the potential of reaching all its parent company’s customers in more than 145 countries around the world. AT the same time, ECtel, managed by Aharon Shach, operates as an autonomous unit within ECI, using an independent marketing network.
Published by Israel's Business Arena October 4, 1999