CINCINNATI-Integrated billing and customer-care services provider Convergys Corp. and Geneva Technology Ltd., a billing software provider based in Cambridge, England, have agreed to merge in a stock-for-stock transaction, the companies announced. Based on Convergys’ closing stock price March 5 of $39.35, the deal is valued at around $692 million.
Convergys said the deal will help the company expand outside the United States, specifically in Europe, and compile a full suite of products on a license, build-operate-transfer, or service bureau basis for wireless voice or data, cable and broadband, wireline and Internet Protocol-based service providers. Approximately 400 employees are expected to join Convergys.
Geneva Technology shareholders will receive a fixed total of approximately 17.6 million Convergys shares and options in exchange for all the outstanding shares and options of Geneva Technology, the companies said. Convergys said it expects the transaction to produce incremental revenues of at least $70 million, $125 million and $210 million in 2001, 2002 and 2003, respectively, although the integration could reduce Convergys’ earnings per share to about 11 cents and 5 cents in 2001 and 2002, with accretion expected in 2003.
“This merger will allow us to grow both the existing Geneva and Convergys businesses faster by using each other’s strengths,” said Steven Edwards, founder, chairman and chief executive officer of Geneva Technology.
The Geneva product will continue to be offered as a standalone solution, as well as part of broader Convergys solutions. Geneva’s software is a strong complement to Convergys’ real-time process manager for mediation, and switch manager for provisioning, Convergys said.
In addition to its headquarters in Cambridge, England, privately held Geneva Technology also has offices in Frankfurt, Germany; Madrid, Spain; Paris; and Washington, D.C. The company said it has more than 40 clients in 17 countries.
The deal is expected to close in April.
In other Geneva Technology news, the company said it launched a service management platform for application service providers with software specialists Tertio Telecoms.
The joint provisioning and billing solution enables ASPs to develop and operate infrastructure spanning billing, service activation and data usage collection.
