Japan’s NEC agreed to acquire Convergys’ information management business for $499 million. NEC said the purchase complements its NetCracker Technology acquisition and solidifies its focus on expanding its reach into the global services and management business.
Among its business goals, NEC said it was looking to garner 10% global share by 2016, reaching $1 billion in sales for its OSS/BSS business, and to further expand business with new solutions utilizing NEC assets.
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“The traditional approach of BSS is changing. The industry is changing significantly. There are four key drivers: The cost of BSS, which is too high; monetization of data; information management in real time; and the desire for more intuited systems,” said Andrew Feinberg, President and CEO of NetCracker, during a conference call with journalists.
Feinberg noted the combined company would have annual revenues of $2.5 billion and a staff of 12,000 employees.
The acquisition is scheduled to be completed by mid-year. UBS Investment Bank acted as exclusive financial advisor to NEC/NetCracker. Following the acquisition, the IM business and organization will be integrated into NetCracker.
NetCracker will be responsible for all business operations of the combined entity, and will add BSS software and services to its telecom operations and management solutions suite. The company said the combined resources and assets of NEC, NetCracker and IM — including software, services, data centers and R&D investment — will create a telecom software-focused business.
Convergys’ BSS Business last year posted sales of $329 million and counts 2,500 employees.
NEC noted carriers are continuously increasing investment in OSS/BSS, and there is a growing need for next generation OSS/BSS aimed to improve services and cost-effectivenes.
Nobuhiro Endo, president of NEC, noted the acquisition of the IM business will enable NEC to bring even greater value and benefits to the service provider industry.
NEC estimates that OSS/BSS global market will reach $9.9 billion by 2015.
