Subex Azure to acquire Syndesis Ltd in cash deal valuing at US$ 164.5 million

Subex Azure Ltd has announced that the Board of Directors of the Company at its meeting held on January 18, 2007, has decided to acquire Syndesis Ltd, a leading global provider of telecom OSS (Operations Support Software) solutions, based out of Toronto, Canada in all cash deal valuing at US$ 164.5 million.

The Company, on January 18, 2007, announced that it has entered into a conditional contract to acquire Syndesis Ltd, a leading global provider of telecom OSS (Operations Support Software) solutions, in an all cash deal. The deal values Syndesis at US$ 164.5 million based on TIM revenue of US$ 45 million. If completed, this acquisition will be a significant milestone in Company’s drive to become the leading global vendor of telecom OSS solutions.

"Subex Azure' success of the last few years, as the we grew to be one of the leaders in the Revenue Maximization solution segment, is driven by our strategy to offer a portfolio of software solutions that helps telecom operators gain competitive advantage," said Subash Menon, Chairman, Managing Director and CEO of the Company. "Subex Azure has identified a compelling opportunity to replicate its current success by extending its offering to the Fulfillment and Assurance solution segment through the acquisition of Syndesis, a leading vendor in this segment. We expect this major acquisition to add significant value for our shareholders."

"Subex Azure has always aimed to deliver solutions that help telecom operators gain competitive advantage. In a rapidly commoditizing business, telecom operators sought competitive advantage through operational efficiency. Subex Azure's Rocware™ solution suite is aimed at addressing a telecom operator's need for operational efficiency," said Subash, "Telecom operators now stand on the threshold of a new business model dependent on their ability to deliver next generation all-IP services such as VoIP, IPTV, etc. Competitive advantage will now be gained by demonstrating operational dexterity, through reduced time-to-market for new services, rapid service provisioning, maintaining high quality of service delivery and doing so in a cost efficient manner. The acquisition of Syndesis - a recognized leader in the Fulfillment and Assurance solution segment will enable Subex Azure extend its product portfolio to provide field-proven solutions that empower operational dexterity."

If completed, this acquisition will allow the Company to substantially expand not only its product portfolio but also its addressable market. OSS Observer reported that, in 2006, the total addressable market size for the combination of Fraud & Revenue Assurance, Interconnect, Service Assurance and Service Fulfillment solution segments was US$ 2.5 billion. Further, this market size is expected to grow to US$ 4.5 billion by 2010. The Company which already has a market share of 29% of the US$ 216 million global Fraud and Revenue Assurance solution market will aim to replicate its success in the new markets of Service Assurance and Service Fulfillment.

The acquisition of Syndesis, the vendor with the second largest market share globally for service activation solutions is a logical development in the Company's strategy of increasing its solution portfolio to areas that telecom operators identify as key to gaining competitive advantage. For the Company's current customers, the acquisition will provide access to a host of new but field-proven OSS solutions focused on the automation of fulfillment processes, the ability to establish leaner, more efficient operations, and the ability to actively manage operations costs. For current Syndesis customers, the acquisition provides access to enhanced solution delivery capabilities, especially in EMEA and the Asia-Pacific regions and a broader solution portfolio for addressing key areas such as revenue assurance, fraud management, interconnect billing and routing management. Further, the deal will provide the Syndesis business with access to expanded resources for future solution development.

Immediately following the close of the transaction, which is expected on or before March 31, 2007, Syndesis will become a part of the Company. The expanded Company will then reorganize itself into three distinct Strategic Business Units (SBUs) - Revenue Maximization Solutions SBU, Fulfillment & Assurance Solutions SBU and BT Business SBU. The Company's current business, excluding business from British Telecom, will form the first SBU, the current Syndesis business will form the second SBU and the current Company's business from British Telecom will form the third SBU. These SBUs will operate as independent revenue centers, each focused on delivering on its strategic plan and each leveraging its independent resources of account managers, domain experts and support specialists for superior product delivery and customer satisfaction.

Source : Equity Bulls

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