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Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail bwalko@sokoloffco.com with your contact information.

Archives > Transaction Case Study 23

Subex Azure completes its Acquisition of Syndesis Ltd.

Dear Colleague,

On April 1, 2007, Bangalore-based Subex Azure Ltd. completed its acquisition of Toronto-based Syndesis Ltd. for US$165.4 million in cash.

Peter A. Sokoloff & Company advised Subex Azure Ltd. on the transaction.

Subex Azure is the worldwide market share leader in Fraud Management and Revenue Assurance solutions to telecom service providers. The company also provides interconnect billing and routing management   With the addition of Syndesis, Subex Azure gains an extensive service fulfillment platform that enables telecom operators to create, offer and automate advanced communications services such as IPTV, VoIP and broadband.

Subex Azure is publicly traded on the Indian exchanges and also trades as a GDR (Global Depository Receipt) on the London and Luxembourg exchanges.

In the Fiscal Year Ending July 31, 2006, Syndesis posted annual revenues of $40.214 million and EBITDA of $3.636 million.  The price paid and Enterprise Value are nearly identical, so the transaction is equal to 4.13 x revenue and 45.5 x EBITDA.

To fund the acquisition, Subex Azure raised US $180 million in the form of 2% Coupon Convertible Unsecured Bonds.  The bonds are convertible to common stock at a price approximately 22% above the closing share price on April 2nd.  On April 2nd, the fully diluted market capitalization of Subex Azure was approximately US $590 million.

“This acquisition strengthens Subex Azure’s leadership status in the telecom OSS space,” said Subash Menon, Founder Chairman, Managing Director & CEO, Subex Azure. “With an expanded solution portfolio that combines revenue maximization solutions with fulfillment and assurance solutions, Subex Azure is the partner of choice for telecom operators. They can now focus on gaining competitive advantage through operational dexterity by marrying reduced time-to-market for new services, rapid service provisioning, high-quality service delivery and cost efficiency.”

Subex Azure's customers include 32 of the world's 50 largest telecom operators by revenue.  The company has more than 150 installations in over 60 countries.

We hope that you find this feature from Sokoloff & Co. interesting, informative and useful.  We welcome your comments and suggestions.

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