cVidya enters merger agreement to acquire ECtel1
cVidya enters merger agreement to acquire ECtel
London, UK, October 22, 2009 – cVidya Networks, a global leader and innovative provider of Telecom Revenue Assurance, Data Integrity and Dealer Management products, announced today that it has entered into a definitive merger agreement for the acquisition of ECtel Ltd. (NASDAQ: ECTX) (“ECtel”), a leading provider of Integrated Revenue Management™ (IRM®) solutions for communications service providers, 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 ECtel’s shareholders vote in favor of the transaction. 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. 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. Upon the closing of the transaction, ECtel’s ordinary shares will be delisted from NASDAQ.
Yair Cohen, Chairman of the Board of Directors of ECtel, commented on the transaction: “Our focus, as a Board, has always been to maximize long term shareholder value. At the Board we evaluated our strategy going forward and, while evaluating the opportunities, we also recognize the challenges of continuing the path as an independent public company operating in a competitive and consolidating market that is limited in its size. After careful and thorough analysis, and with the completion of extensive negotiations with the buyers, the Board of Directors has decided to endorse this transaction as being in the best interest of our shareholders and recommends that it be approved by the shareholders.”
Itzik Weinstein, President and CEO of ECtel added: "This merger, which brings together two key players in the industry, enables us, as part of a unified group, by leveraging inherent synergies, to further expand our product offering, customer base and geographic breadth. Furthermore, it grants us the necessary tools to further strengthen and grow our standing in the global marketplace. As demand for revenue assurance and fraud management products rises, solutions such as ECtel’s become ever more critical by offering both tangible benefits and a competitive edge to communications service providers. This transaction presents substantial opportunities for our customers, employees and partners, and we will work towards completing the transaction in a swift and efficient manner. Our success is driven by the hard work, commitment and dedication of our capable employees around the world and I thank them for their invaluable contribution."
Alon Aginsky, President, CEO and Founder of cVidya Network, concluded: “We look forward to having the ECtel team join us. ECtel is a great company, with an impressive talent pool, top notch customer base and leading quality products. This strategic acquisition marks another significant milestone in our growth strategy of expanding our foothold in the communication, media and entertainment markets, by creating the largest and most innovative company in the world offering revenue management, fraud management, dealer management and clearinghouse services. We are excited about the many and varied opportunities presented by this move, and believe it will lead to accelerated growth and profitability.”
ECtel (NASDAQ:ECTX) is a leading global provider of Integrated Revenue Management™ (IRM®) solutions for communications service providers. A pioneering market leader for nearly 20 years, ECtel offers carrier-grade solutions that enable wireline, wireless, converged and next generation operators to fully manage their revenue and cost processes. ECtel serves prominent Tier One operators, and has more than 100 implementations in over 50 countries worldwide. Established in 1990, ECtel maintains offices and has a presence in the Americas, Europe and Asia. For more information, visit http://www.ectel.com/.