CSG Systems International - 7/16/2012
CSG International Announces the Acquisition of Ascade
Strengthens Position as the Industry Leader in Wholesale Routing and Billing Market
CSG Systems International, Inc., a global provider of software- and services-based business support solutions that help clients generate revenue
and maximize customer and partner relationships, today announced the acquisition of Ascade, an independent Swedish software company who
provides market-leading trading and routing software solutions to telecommunications companies globally. The total cost of the acquisition,
excluding transaction fees, was approximately $19 million. The purchase price was paid in cash from CSG's existing cash resources.
By bringing together Ascade's flagship trading and routing solution, Ascade7, with CSG's Wholesale Business Management Solution (WBMS),
CSG firmly establishes its global leadership position in the telecommunications wholesale marketplace. The acquisition expands and strengthens
its geographic presence, bringing product specialists and support resources closer to its combined 300+ wholesale customers worldwide.
"As the leading wholesale billing provider for the telecom marketplace, our clients have come to expect innovative solutions from us that help
expand and enhance their business operations," said Peter Kalan, president and chief executive officer of CSG International, Inc. "Our
acquisition of Ascade will help us continue to deliver market-leading solutions that help our clients operate nimbly and efficiently. Our combined
offering and global presence ensures that operators of all types - fixed, mobile, wholesale, broadband, MVNOs and ISPs - have a partner in CSG
with the breadth of functionality and flexibility in delivery models to meet their current and evolving wholesale needs."
As telecom carrier partnerships expand and become more complex, the number of VoIP carriers is also growing as is the number of wholesale
relationships with third party content owners. CSG's extensive product portfolio enables these carriers to deliver best-in-class customer service in
this dynamic marketplace, with increasing automation and the greatest assurance for both their retail and wholesale revenue streams; a critical capability in this complex and ever-changing environment.
"For many carriers, their wholesale business has always represented a significant component of their overall revenue. As their business models
evolve to address growth in areas such as digital content and M2M services, the wholesale component becomes more complex," said Karl
Whitelock, Director OSS/BSS Strategy, Stratecast | Frost & Sullivan. "This means communications service providers (CSPs) are increasingly
looking for sophisticated, scalable technologies that can deliver wholesale transactions with accuracy, timeliness, and with a high level of service
The approximate $19 million purchase price translates into a revenue multiple of approximately 1.2 times 2011 Ascade revenues and
approximately 16 times 2011 EBITDA (earnings before interest, taxes, depreciation and amortization).
CSG is not updating its 2012 financial guidance today to include the impact of the closing of the Ascade acquisition on July 13, 2012 as the
company does not expect a material impact to 2012 revenues and earnings from the acquisition. CSG will provide updated 2012 non-GAAP
financial guidance to reflect the impact of the acquisition on its regularly scheduled Q2 2012 earnings call on August 7, 2012. The final estimated
impact on GAAP results will not be known until CSG completes the purchase accounting for the acquisition later in the year.