The Hindu Business Line : Subex buys Alcatel unit for $3 m

TELECOM software products firm Subex Systems Ltd has acquired the fraud management group of French telecom major Alcatel for $3 million in an all-cash deal.

The buy-out will help Subex add 30 new clients to its roaster of 39 clients and pip market-leader Hewlett Packard to the top slot in the niche fraud management segment, according to the company's CEO, Mr Subash Menon. "It means a lot to us, but for Alcatel it is a small piece," he said.

This buy-out will help Subex spread its footprints in western European markets and the company will open a sales and support office in London soon. Out of the 30 new customers, 25 are active clients and 18 of them provide maintenance revenue.

Subex will manage the installed Alcatel's fraud management systems at these clients' sites and help them migrate to Subex's own fraud management system Ranger over the next 18 to 24 months, Mr Menon said. Hence, Subex did not detail expected revenue flow due to this buy-out in its current financial year's earnings. Since, the company feels that such revenue will come in only from next fiscal, it did not revise its current guidance of 15 per cent to 20 per cent top line growth.

The company is also likely to take over "16-17 Alcatel" employees on its rolls following this acquisition, he said. Alcatel will push Subex products that include revenue maximisation software in new deals, he added. Close to 15 per cent of the deal value hinges on the performance of how Alcatel pushes Subex products. Subex said it would raise $10 million foreign currency convertible bonds.

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