Ericsson beefs up OSS power by acquiring Telcordia for $1.15B

Ericsson confirmed that it has made a $1.15 billion bid to acquire Telcordia, giving the company an enhanced set of OSS/BSS tools it can take to both the wireless and wireline markets it serves.

This bid, which is slightly below reports that its owners wanted $1.5 billion for the company, puts an end to months of speculation that Telcordia's owners Providence Equity Partners, LLC and Warburg Pincus, was placing the company on the auction block.

Hans Vestberg, President and CEO, Ericsson, said during a call with investors that the acquisition of Telcordia will "reinforce and expand" in the OSS/BSS markets.

Vestberg added that Telcordia will complement its well-established "global presence and scale, global services capabilities and superior knowledge about networks and network performance, as well as an already established position in the OSS/BSS space."

Through this acquisition, Ericsson will also gain Telcordia's 200-plus customers in 55 countries, including a mix of wireline and wireless customers. Some of its North American customers include the likes of AT&T (NYSE: T), Verizon (NYSE: VZ) and the former Qwest, now CenturyLink (NYSE: CTL).

In addition to gaining greater OSS/BSS capabilities and new customers, the deal will enhance Ericsson's managed service portfolio. Already, Ericsson provides managed services to both Sprint and Telefonica Brazil.

After meeting customary regulatory approvals, Ericsson believes the Telcordia acquisition will be accretive to Ericsson earnings per share within 12 months.

Originally, Telcordia was a creation following the divestiture of the former Bell Telephone System known as Bellcore with the intent of providing research and development for the former seven RBOCs. Later, Telcordia became a subsidiary of government integrator SAIC in 1995 and then sold to private equity firms in 2004 for $1.35 billion.

For more:
- see the release
- here's FierceWireless' take

Related articles:
Telcordia's owners hope to get $1.5 billion for company
Ericsson surges in Q1 on strong sales, but sees component issues

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