**Editor's Note: Please click here for the biggest M&A in Q3 2012 in the service-provider and BSS/OSS spaces.**
It's been quite the week of wheeling and dealing for Nokia Siemens Networks.
Just two days after announcing it's divesting its optical networking business, NSN said on Wednesday that it will sell its business-support systems sector to Toronto-based Redknee, a provider of billing and charging software and solutions.
Nokia Siemens Networks' BSS business 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. Redknee says the strength of its management team, continuity of the current BSS portfolio, and access to innovation for NSN's BSS customers were the biggest reasons Nokia Siemens agreed to sell to the Canadian company.
Approximately 1,200 employees will transfer to Redknee, underpinning current service levels and quality for customers. The planned acquisition, pending regulatory approval, would bring to Redknee a global footprint that spans more than 90 countries across Europe, Asia Pacific, the Middle East and Africa.
"This planned acquisition marks a significant milestone in Redknee's long-term growth strategy," said Lucas Skoczkowski, Redknee's CEO. "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."
"Both Redknee and Nokia Siemens Networks have a reputation for high quality and customer commitment, which provides a common foundation for Redknee to build the BSS business in the future," said Rajeev Suri, CEO of Nokia Siemens Networks. "We will work with Redknee to ensure a smooth transfer of the business and to provide some mobile broadband specific elements of the BSS portfolio to our customers."
Nokia Siemens is in the middle of a transition to specializing in mobile broadband.
The acquisition would involve the transfer to Redknee of Nokia Siemens Networks' BSS customer and supplier contracts, intellectual property rights, fixed assets and associated liabilities, along with BSS employees. The employees expected to transfer to Redknee are mainly based in Berlin, Germany; Bangalore, India; and Wroclaw, Poland.
"NSN need[ed] to sell this asset to ensure that ongoing speculation over NSN in the market [doesn't] result in the loss of customers, staff and value of the business, like a melting ice cream on a sunny day," noted Justin van der Lande, head of the revenue management research program at Analysys Mason.
Redknee expects to finance the transaction through a combination of cash on its balance sheet and debt facilities. Such debt facilities are subject to conditions and will be entered into on and subject to closing of the acquisition. Redknee will pay NSN 15 million euros in cash at closing, plus a maximum of 25 million euros (total: $52.3 million U.S.) for certain performance-based cash earn-outs expected to be paid over a one-to-three-year span post-closing.
The acquisition is anticipated to close in the first half of 2013.