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Ericsson completes Telcordia purchase
12 January 2012
Multimedia head Per Borgklint in charge as Ericsson completes purchase of Telcordia, two weeks behind schedule
Ericsson has today completed its $1.15 billion acquisition of telecoms software and services company Telcordia.
The equipment company paid cash for the company to the previous shareholders, private equity groups Providence Equity Partners and Warburg Pincus, which bought Telcordia for $1.35 billion in 2004. Telcordia’s 2,600 employees — 900 fewer than in 2004 — will join Ericsson’s multimedia unit, boosting the company’s activities in OSS/BSS.
Ericsson was originally hoping to complete the deal — announced in June 2011 — by the end of December 2011, but it failed to get approval from all regulators in time.
Per Borgklint, head of the multimedia business unit, said: “The addition of Telcordia’s skilled people and knowledge, a good multivendor product portfolio and an important customer base in North America, complement Ericsson’s already established position in the OSS/BSS space.”
Ericsson is expected to keep the Telcordia brand running for a brief time after the merger, but eventually the name will disappear, Ericsson CEO Hans Vestberg confirmed to Global Telecoms Business in early December. “That’s why we bought the company,” he said at the time.
Telcordia had revenues of $739 million during the last fiscal year ended January 31 2011. Sales and margins will be shared between multimedia and services business units in Ericsson, said the company, depending on portfolio mix.
Borgklint added: “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.” GTB
Further reading from Global Telecoms Business:
Global Telecoms Business deals of the year 2011 01 Jan 2012
Plotting a new course for OSS 19 Aug 2011
Ericsson to acquire Telcordia for $1.15bn 14 Jun 2011
Telcordia owners 'plan $1.5bn sale' 17 Jan 2011
Interview: Mark Greenquist of Telcordia 29 Jun 2010