ST. LOUIS—Software developer and billing platform provider Amdocs Ltd. plans to enter the digital transaction space with a $275 million buyout of Seattle-based Qpass Inc.
Qpass’ technology facilitates content sourcing, merchandising, delivery and billing across mobile, VoIP and Wi-Fi networks. Amdocs said the all-cash deal, which has been the subject of rumors for several weeks, will allow its customers to create additional sources of revenue by selling digital goods across platforms and networks.
“Service providers are working hard to adapt their networks and business models to take advantage of the growing content and services market,” Amdocs Chief Executive Officer Dov Baharav said in a prepared statement. “This transaction creates a unique combination that will help realize the transformation of service providers from carriers of voice and data services to dynamic retailers of ubiquitous, converged services and digital content.”
Amdocs develops and markets customer relationship management software, and works with 150 service providers including wireless operators. Qpass has relationships with more than 300 content providers, and the company’s customers include Cingular Wireless L.L.C., T-Mobile International, Sprint Nextel Corp. and Skype. In recent months, Qpass has been touting its technology as a way to reduce carrier’s “revenue leakage” that stems from selling content and applications from a variety of publishers and aggregators.
The move follows last month’s announcement that VeriSign Inc. will pay $250 million in cash to acquire mobile messaging and content services provider m-Qube Inc.
The Qpass deal is expected to close by July. Amdocs said the transaction is expected to dilute earnings per share by a penny or two, and the company may incur a one-time charge during its third fiscal quarter to account for certain costs related to the acquisition.
Investors were ambivalent regarding the move, though, as shares of Amdocs initially rose then dipped following the news. The stock had completely rebounded by mid-day, holding at $35 per share on the New York Stock Exchange.
