Israeli telecom IT business systems company Amdocs Ltd. (Nasdaq: DOX) announced after the market closed last night that it is acquiring Irish-based 5G cloud tech company Openet for $180 million cash.
Privately-owned Openet, which has had annual revenue of $70 million over the past two years, develops 5G payment and billing solutions for cloud, edge computing, and Internet of Things (IoT) and will help Amdocs support its customers in their transition to the cloud.
Amdocs president and CEO Shuky Sheffer said, "We are delighted the innovative Openet team is joining Amdocs. They bring world-class cloud-native capabilities, network pedigree, and deep 5G charging, policy and data management expertise. The Openet solutions complement our portfolio and this acquisition is part of our mission to accelerate the industry’s move to the cloud."
Amdocs serves the world's largest telecom companies and 66% of its revenue is generated from its ten largest customers. The company makes occasional acquisitions in order to broaden the scope of its solutions although this is its largest acquisition since it bought Comverse's billing division in 2015 for $272 million.
Amdocs had cash reserves of $762 million at the end of the first quarter of 2020 and has spent $2.6 billion over the past five years on buying back shares and paying out dividends. The acquisition won't impact adjusted non-GAAP profit for the 2020-2021 financial years and after that the influence will be positive. The deal is due to be completed before the end of the fourth fiscal quarter in 2020.
Amdocs has 4,500 employees in Israel and 25,000 worldwide and is currently in the process of laying off hundreds of employees both in Israel and overseas.
Amdocs share price rose 1.20% on Nasdaq yesterday to $60.61, giving a market cap of $8.1 billion. In the past five years the share price has risen by just 9% while Nasdaq has risen 100% over the same period.
Published by Globes, Israel business news - en.globes.co.il - on July 24, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020