In what could well be the first of a round of industry solution provider M&A activity, cVidya has acquired ECTel.Â ECtel Ltd, a provider of revenue management solutions for communications service providers, announced today that it has entered into a definitive merger agreement for the acquisition of the Company by cVidya Networks Inc, provider of telecom revenue management, risk management, and dealer management solutions, in a cash transaction valued at $21 million (less transaction expenses of approximately $430,000).
Under the terms of the agreement, ECtel shareholders will receive approximately $1.26 per share in cash upon the closing of the transaction, representing a premium of approximately 58% over ECtel’s average closing share price over the 90 trading days ended October 21, 2009. There is no financing condition to the obligations of cVidya to consummate the transaction. The definitive agreement contains customary representations and warranties, covenants, closing conditions, termination provisions, exclusivity requirements and arrangements to handle superior proposals.
The Board of Directors of ECtel unanimously approved the agreement and recommend that ECtelâ€™s shareholders vote in favor of the transaction.Â The closing of the transaction is subject to the approval of ECtel’s shareholders, certain regulatory approvals and notifications and the satisfaction of other customary closing conditions.Â It is currently anticipated that the transaction will be consummated following the satisfaction of all closing conditions which is anticipated to occur by the end of 2009.Â Upon the closing of the transaction, ECtelâ€™s ordinary shares will be delisted from NASDAQ.
Although ECTel and cVidya operate in very similar space other M&A activity in the telco BSS solutions space may well come from other broader-based solutions providers looking at completing their portfolios with an RA option.Â Watch this space.