Cable billing company Convergys Corp. has signed a deal to acquire a British
software developer for $692 million in stock, giving it a foothold in the
international market.
Convergys said Tuesday that it would issue 17.6 million shares of its common
stock for all of the outstanding shares of Geneva Technology Ltd. of Cambridge,
United Kingdom. Based on Convergys' closing price of $39.35 per share March 5,
the deal is worth about $692 million.
Geneva -- which makes billing software for the telecommunications,
electronic-commerce, utilities and online-services markets -- will become a
wholly owned subsidiary of Convergys after the deal is closed, expected in
April.
In a press release, Convergys said key elements in its strategy have been to
increase its penetration in markets outside of the United States, to strengthen
its position in Internet-protocol billing and to offer a full suite of services
to its customers.
'The combination of Convergys and Geneva Technology immediately enhances our
ability to succeed in each of these areas,' Convergys chairman Jim Orr said in a
prepared statement.
Convergys expects the merger to add about $70 million in revenue during 2001,
growing to $125 million in 2002. However, the company said, it would also have a
negative impact on earnings per share, diluting it by 11 cents and 5 cents in
2001 and 2002, respectively.
Convergys' stock took a hit in afternoon trading Tuesday, dropping 84 cents
to close at $38.51 each.
