Comptel buys Axiom Systems to strengthen IP service suite

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Kieran Moynihan
Vice President & CTO Telecoms
IBM Tivoli Division

2008-04-21 11:22:21

Comptel is strengthening its position as a leading provider of fulfilment solutions for broadband, mobile and next-generation IP networks by acquiring Axiom Systems (Axiom), a UK-based software product company focusing on broadband fulfilment. The acquisition will help Comptel to capitalise on service providers' growing investments in new IP-based services, like VoIP and IPTV.

Axiom Systems is a specialist in IP fulfilment with a good market position in Europe as well as key customers in Asia-Pacific. Its net sales last year were £7.8 million (€11.5 million) and the company was EBITDA negative in 2007. Axiom currently has 87 employees. The net sales in 2008 are estimated to grow about 15%. Consolidation of Axiom is estimated to increase Comptel net sales around 10% in 2008. Axiom’s EBITDA impact to Comptel in 2008 is expected to be neutral before one-off items, which are estimated to be €1 million.

Mr Sami Erviö, president and CEO of Comptel, commented: “I am enthusiastic about this acquisition, since now Comptel is uniquely strongly positioned to support its customers in automating the delivery and management of new IP-based services like IPTV. With Axiom we are a leading provider of service fulfilment solutions for fixed, mobile and convergent operators and service providers. Axiom has excellent IP network competencies and has proven capabilities for next generation service fulfilment. Together we are well positioned globally and especially strong in Europe, Asia-Pacific and Middle East. We now have the right competencies, the leading customers and the presence to gain market share in the emerging all-IP network based fixed-mobile convergent telecom industry.”

Comptel Corporation is acquiring Axiom Systems Holdings Ltd for a cash consideration of £7.0 million (€8.9 million). Comptel Corp pays an additional purchase price if Axiom Group’s audited net sales in 2008 are more than €13.5 million. The additional price may vary between £4 million and £16 million. The maximum amount will be paid if Axiom Group’s audited net sales in 2008 reach €21.6 million. The additional purchase price is comprised of both cash and Comptel shares.

Axiom Group’s balance sheet will be free of interest-bearing debt and will have a positive net working capital balance. The acquisition is financed through Comptel Corporation’s liquid assets and by raising approximately €5.0 million of debt. If the additional purchase price is paid, a maximum of 4.8 million new Comptel shares will be issued.

The acquisition is completed on 21 April 2008 from which Axiom Group will be consolidated. The main selling shareholders are private equity funds managed by Geocapital Partners, Hg Capital and Axiom’s management.

The annual cost synergies from the transaction are estimated to be €2 million starting from 2009. One-off items of restructuring and integration costs are estimated to be €1 million in 2008. Furthermore, Comptel expects revenue synergies to realise 2009 onwards from cross-selling the convergent dynamic OSS solution to existing Axiom and Comptel customer bases and by leveraging Comptel’s stronger market position outside Europe to increase Axiom’s solution sales. The project for integrating the businesses is estimated to be completed by the end of 2008.

Gareth Senior, the CEO and CTO of Axiom Systems, will continue in his role as CEO of Axiom. He has been also nominated as a member of Comptel Group’s Executive Board.

Filed under: Company News OSS IPTV