Business and billing systems provider Amdocs Ltd. (NYSE: DOX) has acquired the business support systems (BSS) unit of Comverse Inc. (Nasdaq: CNSI) for $272 million in cash. Amdocs announced the acquisition last night after the close of trading on Wall Street, alongside its financial results for the fiscal quarter ending March 31.
Amdocs said that the acquisition geographically complements its market focus by expanding and diversifying Amdocs' global customer base, particularly in Asia Pacific, Latin America and Europe, and including Europe's cable and satellite market.
Comverse, formerly one of Israel’s flagship high-tech companies, is in the process of gradually divesting its assets. Earlier this month, it announced a cooperation agreement with India’s Tech Mahindra, which includes the transfer of hundreds of Comverse digital services employees to the Indian company. Comverse will continue to exist as a separate company, with a focus on expanding its global market leadership in digital services.
Amdocs president and CEO Eli Gelman said, "As a result of this acquisition Amdocs, with its more than 30-year industry experience, will be able to bring additional value and innovation to Comverse's customers. As we move forward, the strength of our company and unique business model which combines products and services will enable Amdocs to offer even better services to customers as we leverage our joint professional industry expertise for the benefit of our customers."
The impact of the acquisition on Amdocs' diluted non-GAAP earnings per share is expected to be neutral in the first year after closing, and accretive thereafter, the company said.
For the fiscal quarter ending March 31 2015, Amdocs reported revenue of $902.6 million, down 0.4% on the corresponding quarter, and below the analysts' consensus of $915 million. Non-GAAP net profit was $0.82 per share (meeting the analysts' consensus), slightly up from $0.81 in the corresponding quarter.
Amdocs reiterated its guidance of $885-925 million revenue in the third fiscal quarter of 2015 and non-GAAP profit EPS of $0.79-85.
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2015
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