Amdocs acquires Sourced to Further Boost Communications Industry’s Move to the Cloud

Rhea-AI Summary

Amdocs (NASDAQ: DOX) has acquired Sourced Group for approximately $75 million, enhancing its cloud-native offerings. This acquisition will leverage Sourced's expertise in large-scale cloud transformations, particularly in finance and communications sectors. Amdocs aims to expand its service capabilities for over 350 service provider customers globally. The deal's impact on Amdocs' non-GAAP diluted EPS is projected to be neutral for the fiscal year 2021, while the GAAP EPS effect remains undetermined until purchase price allocation completion.

Positive

• Acquisition enhances Amdocs' cloud-native product portfolio.
• Access to Sourced's cloud migration expertise boosts service capabilities.
• Expansion of customer base in North America, Asia-Pacific, and Australia.

Negative

• Integration challenges may arise from the acquisition.
• The impact on GAAP diluted EPS is currently unknown.

Deal expands Amdocs’ portfolio of market-leading cloud-native products and services; brings Sourced’s decade-long experience of delivering cloud at scale

ST. LOUIS, May 12, 2021 (GLOBE NEWSWIRE) -- Amdocs (NASDAQ: DOX), a leading provider of software and services to communications and media companies, today announced it has acquired Sourced Group, a leading global technology consultancy specializing in large-scale cloud transformations for sophisticated, high-end enterprises in industries such as financial services, communications and others. The two companies are excited by the opportunity to strengthen Amdocs’ capabilities for taking the communications industry to the cloud and bring to Amdocs’ 350+ service provider customers Sourced’s decade-long experience of delivering cloud at scale.

“We are delighted the innovative Sourced team is joining Amdocs. We are proud to bring such great professionals and practices to our industry and look forward to working with their wide-reaching customer base in North America, Asia-Pacific and Australia. This acquisition is part of our wider cross-company investment in the cloud and will further solidify our leadership in this domain as we accelerate our strategy to take the communications and media industry to the cloud,” said Shuky Sheffer, President and Chief Executive Officer of Amdocs Management Limited. “Sourced’s proven cloud migration platform, deployment framework and trusted design process, alongside its deep partnerships with Amazon Web Services, Microsoft Azure and Google Cloud Platform, complement our portfolio of cloud-native products and services and further expands and diversifies our customer base.”

“We are excited to join Amdocs and believe the combination of Amdocs’ cloud-native products and services and our high-end consulting and deep expertise across the entire cloud transformation process will prove compelling for service providers as they move to the cloud,” said Jon Spinks, Sourced founder and CEO. “We also look forward to continuing serving our current customers and leveraging Amdocs’ scale to further accelerate their cloud journeys.”

Sourced, a previously privately-owned company headquartered in Toronto, has offices in Australia, Singapore and Malaysia.

Amdocs acquired Source in mid-March for a net consideration of approximately $75 million in cash¹. Additional consideration may be paid later based on the achievement of certain performance metrics. The impact of the acquisition on Amdocs’ non-GAAP diluted earnings per share² is expected to be neutral in the full fiscal year 2021. The impact on GAAP diluted earnings per share will not be known until after Amdocs completes the purchase price allocation.

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¹ A net consideration of approximately $65 million was paid in the second fiscal quarter of fiscal 2021, while the remaining amount is expected to be paid in the third quarter of fiscal 2021
² Non-GAAP diluted earnings per share excludes amortization of purchased intangible assets and other acquisition-related costs, changes in certain acquisitions related liabilities measured at fair value, equity-based compensation expenses, gain from divestiture of OpenMarket and other, net of related tax effects

Supporting Resources

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About Amdocs

Amdocs’ purpose is to enrich lives and progress society, using creativity and technology to build a better connected world. Amdocs and its 27,000 employees partner with the leading players in the communications and media industry, enabling next-generation experiences in 85 countries. Our cloud-native, open and dynamic portfolio of digital solutions, platforms and services brings greater choice, faster time to market and flexibility, to better meet the evolving needs of our customers as they drive growth, transform and take their business to the cloud. Listed on the NASDAQ Global Select Market, Amdocs had revenue of $4.2 billion in fiscal 2020. For more information, visit Amdocs at www.amdocs.com.

Amdocs’ Forward-Looking Statement

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs’ growth and business results in future quarters. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general economic conditions, the duration and severity of the COVID-19 pandemic, and its impact on the global economy, Amdocs’ ability to grow in the business markets that it serves, Amdocs’ ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, potential loss of a major customer, our ability to develop long-term relationships with our customers, and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, the Company specifically disclaims any obligation to do so. These and other risks are discussed at greater length in Amdocs’ filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2020 filed on December 14, 2020, and our Form 6-K furnished for the first quarter of fiscal 2021 filed on February 16, 2021.

Media Contacts:

Jeff Barak
Amdocs Public Relations
Tel: +972 52 645 3637
E-mail: Jeff.Barak@amdocs.com

Emily Holt
PAN Communications for Amdocs
Email: Amdocs@pancomm.com

FAQ

What is the focus of Amdocs' acquisition of Sourced Group?

Amdocs' acquisition of Sourced Group aims to enhance its cloud-native products and services, leveraging Sourced’s expertise in large-scale cloud transformations.

How much did Amdocs pay for Sourced Group?

Amdocs acquired Sourced Group for approximately $75 million, with additional performance-based consideration possible.

When was Sourced Group acquired by Amdocs?

Sourced Group was acquired by Amdocs in mid-March 2021.

What is expected impact of the acquisition on Amdocs' earnings per share?

The acquisition is expected to have a neutral impact on Amdocs' non-GAAP diluted earnings per share for the full fiscal year 2021.

What industries does Sourced Group serve?

Sourced Group specializes in cloud transformations for industries including financial services and communications.