Ericsson (NASDAQ:ERIC) yesterday completed the acquisition of Telcordia, a global leader in the development of mobile, broadband and enterprise communications software and services, for US$1.15 billion in an all cash transaction, on a cash and debt-free basis. Telcordia is now part of the Ericsson Group and its approximately 2,600 skilled employees have joined Ericsson.
Today's closing follows the announcement on June 14, 2011, that Ericsson had entered into a merger agreement with Providence Equity Partners, LLC and Warburg Pincus to acquire 100% of Telcordia's shares.
Per Borgklint (pictured), head of Ericsson's Multimedia business unit, says: "The addition of Telcordia's skilled people and knowledge, a good multi-vendor product portfolio and an important customer base in North America, complement Ericsson's already established position in the OSS / BSS (operations and business support systems) space.
"OSS and BSS are key to drive the customer experience and serve as the engine to monetising traffic, offerings and products that operators sell. All in all, these systems are crucial to create the experience users expect in a cost-efficient manner."
The combination of the two companies creates the leader in service fulfilment, service assurance and network optimisation and gives Ericsson a leading position in real-time charging and significant capabilities to support operators end to end. The combination will address the needs of communications service providers (CSPs) to deliver mobile broadband and operational transformation to their subscribers.
The OSS/BSS market is growing, driven by the demand for business efficiency, innovation and high quality user experience. In 2010, the market for software and systems integration was valued at about US$35 billion and is expected to show a compound annual growth rate 6 - 8% between 2010 and 2013. In addition, there is an attractive market for outsourced and hosted OSS and BSS managed services, growing in the same range.
Telcordia is headquartered in Piscataway, New Jersey, and generated revenues of US$739 million during the last fiscal year ended January 31, 2011. Telcordia will be managed by Ericsson's Multimedia business unit but sales and margins will be shared between Multimedia and Services depending on the portfolio mix.