A Canadian supplier of billing software for communications service providers is buying Nokia Siemens Networks’ business support systems division.
As NSN sheds non-core operations to focus on its wireless products, it has found a buyer for the charging solutions in Toronto-based Redknee Solutions Inc.
The companies said Wednesday that if approved by shareholders, the deal -- expected to close in the first half of 2013 – would bring 1,200 staff to Redknee. Most are based in Germany, India and Poland.
It would also expand Redknee’s reach to more than 90 countries.
In a statement NSN said its BSS business, which compliments Redknee’s software, provides real-time charging, rating, policy, and customer care solutions to more than 130 communication service providers, including half of the top 100 global mobile operators.
"This planned acquisition marks a significant milestone in Redknee's long-term growth strategy,” Redknee CEO Lucas Skoczkowksi said in the statement.
“It would add strong long-standing relationships with new Tier 1 operators and expand Redknee's market share and presence in high growth markets. Our expanded team would drive the continued success of our customers, as we strive to be the provider of choice for real-time converged billing, customer care, policy, and payment solutions in the communications industry."
The deal includes the transfer of NSN’s contracts with customers and equipment suppliers, intellectual property rights. NSN would retain a small number of broader customer contracts that include elements of BSS for GSM-R and mobile broadband related mediation.
Redknee said it will finance the acquisition through a combination of cash and borrowing. In the fall it raised CDN$20.2 million by issuing new shares.
The announcement came as Redknee released its quarterly and fiscal year end results.
The company said it had net income of $1.9 million (all figures U.S.) in the fourth quarter ending Sept. 30 on revenue of $14.5 million. That revenue was the same as the same period a year ago.
For the fiscal year revenue decreased to $56.9 million from $58.3 million in fiscal 2011. Redknee said that was primarily due to a decline in third party revenue as it shifts to a cloud-based recurring revenue model.
However, net income for the year was a record $5.3 million, compared to a net loss of $1.6 million in fiscal 2011.
NSN started shedding assets just over a year ago with the goal of cutting US$1.35 billion from its bottom line by the end of 2013.