Amdocs (NYSE: DOX) will pay Nortel Networks (NYSE: NT) $200 million for its Clarify CRM (customer relations management) unit. The deal was closed last week, after Amdocs completed its due diligence on Clarify, but it has not yet been officially announced.
Nortel bought Clarify two years ago for $2.1 billion, "Globes" first revealed the possible sale of Clarify to Amdocs. Two weeks ago, "USA Today" reported that Nortel and Amdocs were negotiating the sale of Clarify for $400 million.
Market sources believe the due diligence and timing of the deal – after the terrorist attacks in the US – caused the price to be halved. The sources said that Amdocs exploited Nortel's wish to close the deal before a further expected fall in the markets, due to the attack.
CRM (customer relationship management) systems are used to operate companies' customer service centers, and are used in conjunction with billing systems. If Amdocs acquires its own CRM unit with a worldwide reputation, it will find it easier to compete against well-known CRM companies, especially Siebel Systems (Nasdaq: SEBL), which is considered to be the market leader.
Amdocs declined to respond.
Published by Israel's Business Arena on 20 September 2001