Amdocs to Acquire Openet to Accelerate the Pace of Taking the Communications Industry to the Cloud and Help Service Providers Differentiate in the 5G Era

Rhea-AI Summary

Amdocs (DOX) has announced a definitive agreement to acquire Openet for approximately $180 million in cash. Openet specializes in 5G charging, policy, and cloud technologies. This acquisition is expected to enhance Amdocs' offerings to over 350 service providers globally, facilitating advancements in cloud, edge computing, IoT, and customer experiences. The acquisition is anticipated to be neutral to Amdocs’ non-GAAP diluted earnings per share in fiscal years 2020 and 2021, becoming accretive thereafter. Completion is expected by Q4 fiscal 2020.

Positive

• Acquisition of Openet expands Amdocs' portfolio in 5G technology.
• Expected to enhance service offerings for over 350 global service providers.
• Non-GAAP diluted EPS impact expected to be neutral in the first two years, accretive thereafter.

Negative

• None.

ST. LOUIS, July 23, 2020 (GLOBE NEWSWIRE) -- Amdocs (NASDAQ: DOX), a leading provider of software and services to communications and media companies, today announced that it has entered into a definitive agreement to acquire Openet, a world-leading provider of 5G charging, policy and cloud technologies. The two companies are excited by the opportunity to bring Openet’s open and network-centric technologies to Amdocs’ 350+ service provider customers worldwide, helping them to succeed in the wave of 5G advancements around cloud, edge compute, IoT and new customer experiences.

“We are delighted the innovative Openet team is joining Amdocs. They bring world-class cloud-native capabilities, network pedigree, and deep 5G charging, policy and data management expertise,” said Shuky Sheffer, President and Chief Executive Officer of Amdocs Management Limited. “The Openet solutions complement our portfolio and this acquisition is part of our mission to accelerate the industry’s move to the cloud.”

“We are excited to join Amdocs, with whom we have been alongside at customers for many years, and help bring fast value to service providers’ 5G plans. It is truly a momentous day for Openet and for all of our stakeholders,” said Niall Norton, Openet CEO. “Given the strong momentum of our business this is an optimal time to be joining Amdocs. The caliber, resources and reach of Amdocs will bring significant and widespread opportunities across each of our disciplines.”

“We have been on a 20-year journey in Openet to build a business of which we can all be proud,” said Joe Hogan, Openet founder and CTO. “In recent years, we have built new 5G products which are recognized worldwide for their innovation and modern open, cloud-native architecture. We all look forward to the combined technology strengths of Openet and Amdocs creating new opportunities for service providers at this exciting time of 5G adoption.”

Openet is a privately-owned company headquartered in Ireland, with offices in the US, Malaysia and Brazil and a global customer base.

The Boards of Directors of Openet and Amdocs have approved the transaction for net consideration of approximately $180 million in cash which, subject to the satisfaction of the conditions to closing, is expected to be completed before the end of the fourth quarter of fiscal 2020⁽¹⁾. Openet has been generating in the past two calendar years revenue of roughly $70 million per annum. The impact of the acquisition on Amdocs’ non-GAAP diluted earnings per share is expected to be neutral in the full fiscal years 2020 and 2021, and accretive thereafter. 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 and equity-based compensation expenses, net of related tax effects. The impact on GAAP diluted EPS will not be known until after Amdocs completes the purchase price allocation. Further information relating to this acquisition will be provided on Amdocs’ earnings conference call for the third quarter of fiscal 2020 on August 5, 2020 at 5:00 p.m. Eastern Time.

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98%; width:98%; min-width:98%;">The transaction consideration is denominated in Euro and translated for convenience to USD using the current exchange rate. The final amount in USD will be known at the closing of the transaction.

Supporting Resources

• Learn more about Openet here
• Keep up with Amdocs news by visiting the company’s website
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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 25,000 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 $4.1 billion in fiscal 2019. 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 including Openet, 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. [please confirm whether any other risks related to Openet should be flagged] 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, 2019 filed on December 16, 2019 and our quarterly Form 6-K furnished for the first quarter of fiscal 2020 on February 18, 2020 and for the second quarter of fiscal 2020 on May 18, 2020.

Media Contacts:

Matthew Smith
Head of Investor Relations
Amdocs
Tel: +1 (314) 212-8328
E-mail: dox_info@amdocs.com

Linda Horiuchi
Head of Public Relations
Amdocs
Tel: +1 (646) 581-2568
E-mail: linda.horiuchi@amdocs.com

FAQ

What is the purpose of Amdocs' acquisition of Openet?

The acquisition aims to enhance Amdocs' portfolio in 5G technologies, benefiting over 350 service providers globally.

How much is Amdocs paying for Openet?

Amdocs is acquiring Openet for approximately $180 million in cash.

When is the acquisition of Openet expected to be completed?

The acquisition is expected to be completed before the end of the fourth quarter of fiscal 2020.

What will be the impact of the acquisition on Amdocs' earnings per share?

The acquisition is expected to be neutral to Amdocs' non-GAAP diluted earnings per share in fiscal years 2020 and 2021, and accretive thereafter.