NEC to buy Convergys' Information Management business for US$449m

Andrew Feinberg Andrew Feinberg

Tokyo, Japan & Waltham, Massachusetts, USA. March 22, 2012 — NEC Corporation today surprised the markets by announcing a definitive agreement to acquire Convergys Corporation’s Information Management (IM) business. The deal is valued at US$449 million and covers all of Convergys IM’s business, including Smart Revenue Solutions, across industry verticals such as communications, utilities, and logistics.

The division has long been recognised as one of the industry’s leading providers of business support systems (BSS) with a history pf transformations to communications service providers (CSPs) around the world.

NEC Corporation says that, the acquisition underscores its “long-standing commitment to offer innovative solutions to the communications industry, enabling service providers to transform their business and successfully compete in a rapidly changing environment. The IM business has enabled service providers around the world to transform their BSS environment and create the foundation for next-generation billing, customer care, and revenue management.”

Following the acquisition, the IM business and organisation will be integrated into NetCracker Technology Corporation, a subsidiary of NEC. NetCracker will be responsible for all business operations of the combined entity. With this acquisition, NetCracker will add key BSS expertise, software, and services to its market-leading Telecom Operations and Management Solutions (TOMS) suite.

The combination of Convergys IM’s BSS products and NetCracker’s TOMS solutions will, say the new owners, create a compelling end-to-end portfolio that will bring experience and innovation to service providers and other industry verticals — whether they access BSS/OSS solutions through the cloud, as a managed service, or as an on-premise system.

The combined resources and assets of NEC, NetCracker, and IM — including software, services, data centres, and R&D investment — will create a telecom software-focused business that is unprecedented in its scale and size. NetCracker reports that it will give service providers the industry’s most comprehensive set of TOMS solutions and services anywhere in the world.

“Convergys’ IM business has distinguished itself with a record of successful BSS implementations and exceptional professional services for leading international communications carriers,” said Dr Nobuhiro Endo, president of NEC. “The acquisition of the IM business will enable NEC to bring even greater value and benefits to the service provider industry.”

“Innovative BSS is the foundation of differentiation and long-term success, as service providers increasingly compete by offering new, unique services and customer experience as opposed to connectivity alone,” said Andrew Feinberg (pictured), president and CEO of NetCracker. “With over 2,400 skilled and experienced industry experts and more than 150 customers around the globe, the IM business is at the leading edge of innovation in revenue management and customer experience. We are excited to have this end-to-end offering as a part of NetCracker’s portfolio and look forward to bringing it to service providers and other industry verticals.”

NEC’s communications carrier business features a line-up of software, services, and network infrastructure that helps service providers rapidly deploy and monetise LTE (Long Term Evolution) infrastructure, Mobile Backhaul, Carrier Cloud Computing, undersea cable systems, and more. These systems enable service providers to create globally competitive and distinctive business models. The continued success of NEC’s carrier business has contributed substantially to NEC’s total net sales of Yen3,115 billion (US$37.5 billion) in the financial year which ended March 2011. NEC’s carrier business spearheads NEC’s mid-range goals to further expand its international markets and software services.

The acquisition is scheduled to be completed by late second quarter of calendar year 2012. UBS Investment Bank acted as exclusive financial advisor to NEC/NetCracker.

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