Amdocs, which spent fair portions of the last decade in the courts asserting patent claims against Openet, has acquired the Irish-based billing, charging and policy management software company for $180 million.
Amdocs said that Openet has had annual revenues of about $70 million in the past two years. That puts the cash deal at about 2.5x revenues, with some debt repayments also likely to be falling due.
Openet’s last public equity raise was for $6 million, from Cipio Partners and its own management, in November 2018.
It also took on $20 million in lending at the same time from Silicon Valley Bank and Kreos, as it cut its workforce from 950 to 500 and began a “turnaround” strategy.
A report in the [Irish] Independent said Cipio is the largest shareholder, with management and staff owning 17%. Original investor Cross Atlantic Capital owns 8%, and Taggia 18%, the report said.
Initial investment into Openet came from Cross as well as its management. CTO Joe Hogan is an original co-founder of the business, starting the business over 20 years ago. Niall Norton has been CEO since 2006.
Openet has decent share of charging and policy management space, and had restructured its software to a microservices, cloud-based architecture.
The two companies have history. Amdocs asserted four patents against the company related to IP charging right back in 2011. Its patents were initially dismissed but that ruling was later over-turned in a US Federal court decision, in 2016. The case was not settled until 2018, when Openet licensed the technology in question from Amdocs.
Amdocs largely competes with Openet, so the acquisition could be viewed from one angle as a take-out. Amdocs does, though, have a good reputation for how it treats its acquisitions. It does not tend to “bury” the acquired companies as can happen in other companies, and staff often stay on and make new careers in Amdocs as a whole.
With the likes of Microsoft Azure and Amazon quickly adding telco software capability to their cloud platforms as they attack private wireless and edge cloud markets, Amdocs may also have felt that it wanted to shore up its reach within the policy, charging and billing software space.