Science & Technology
Science and Technology
Science and Technology 
Wed, December 17, 2008
MORRISVILLE, N.C.--([ BUSINESS WIRE ])--Tekelec (NASDAQ:TKLC) today announced the acquisition of privately held mBalance, a leading developer of messaging solutions. mBalance's software enables mobile operators to efficiently support their text messaging growth with a high-performance, networked messaging solution. mBalance's software is already an important element of Tekelec's TekMedia solution which provides a cost efficient and highly scalable means of handling text message growth and security.
Next to voice, SMS – or text messaging – is the most commonly used mobile application. A recent report from Portio Research forecasts that total worldwide SMS traffic is expected to increase from almost 3.5 trillion messages in 2008 to nearly 5 trillion messages annually by 2011.
"This acquisition demonstrates the company's commitment to grow our solutions portfolio and market opportunity by moving into adjacent spaces that build on our core competencies," said Frank Plastina, president and CEO, Tekelec. "mBalance is a well managed company with unique technology. Their software is currently installed in 48 mobile networks around the world, and they have generated positive cash flow from operations since 2005. We expect the transaction to be slightly accretive in 2009 on a non-GAAP basis."
Founded in 2001 in the Netherlands, mBalance has 82 employees and solutions deployed in 48 mobile networks in 38 countries, including 10 deployments in nine countries as part of the TekMedia solution. Products and services include: Message Routing, Message Security, Application Gateway, Active Message Store, and a 2G-3G Message Gateway.
"Joining forces with Tekelec is a natural next step for us, given our successful relationship and our shared vision for the future of messaging," said Marien van Ouwerkerk, chief executive officer, mBalance. "This move will combine our expertise with Tekelec's complementary world-class technology and global delivery power, resulting in a superior messaging offering to mobile network operators worldwide."
Under the terms of the acquisition agreement, Tekelec, through its Belgian subsidiary, Tekelec International, SPRL, has acquired 100% of mBalance's stock for €28 million (approximately US$39.5 million at yesterday's exchange rate) in cash at closing, with up to an additional €14 million of cash consideration payable upon the achievement of certain order input targets over the next two years. The initial purchase price is also subject to a working capital adjustment calculated as the difference in actual working capital at closing and the target working capital balance of €4.8 million. On a GAAP basis, the acquisition is expected to be dilutive in 2009 due primarily to the amortization of acquired intangibles and dilutive in the fourth quarter of 2008 due to the write off of in-process R&D.
About Tekelec
Tekelec leverages its global leadership in core multimedia session control and network intelligence to ensure scalable, secure and highly available communications. The company's leading signaling solutions enable the interworking of different network applications, technologies and protocols, providing a smooth transition to next-generation networks. Corporate headquarters are located near Research Triangle Park in Morrisville, N.C., U.S.A., with research and development facilities and sales offices throughout the world. For more information, please visit [ www.tekelec.com ].
Forward-looking Statements
Certain statements made in this press release are forward looking, reflect the Company's current intent, belief or expectations and involve certain risks and uncertainties. The Company's actual future performance may differ materially from such expectations as a result of important risk factors, which include, in addition to those identified in the Company's 2007 Form 10-K, First Quarter 2008 Form 10-Q, Second Quarter 2008 Form 10-Q, Third Quarter 2008 Form 10-Q and its other filings with the Securities and Exchange Commission, the effect of the current economic crisis on overall telecommunications spending by our customers, further changes in general economic conditions and unexpected changes in economic, social, or political conditions in the countries in which we operate, the timeliness and functional competitiveness of our product releases, our ability to maintain OEM, partner, and vendor support and supply relationships, our ability to compete with other manufacturers that have lower cost bases than ours and/or are partially subsidized by foreign governments or employ other unfair trade practices, the success or failure of our strategic alliances or acquisitions, including the integration of mBalance's operations with our own, changes in the market price of the Company's common stock and reductions in telecommunications carrier capital spending. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.