Telcordia on the block?

Telcordia Technologies is being shopped around to potential strategic buyers by J.P. Morgan, the company’s advisor, according to a report on The Deal.com this morning.

A Telcordia spokeswoman said the company can’t comment on speculation and rumor.

Telcordia, a subsidiary of privately held Science Applications International Corp. (SAIC), does approximately $1 billion in revenue annually supporting operations support systems for major carriers primarily in the U.S. However, the company has been expanding internationally over the last two years.

Telcordia’s revenue dipped slightly since last year. CEO Matt Desch instituted a 10% price reduction for RBOCs on many of the company’s primary legacy software systems, roughly the amount of the decline in revenue. The company also launched a new Elementive campaign aimed at promoting its next generation solutions.

Telcordia, also maintains the research unit it took on as Bellcore during the divestiture of 1984. Telcordia was recently awarded a patent for its softswitch and call control technologies, for which it expects to collect millions in revenue.

It was reported that potential financial sponsors would include Warburg Pincus LLC; Gores Technology Group LLC; Welsh, Carson, Anderson & Stowe and GTCR Golder Rauner LLC. And companies such as IBM, HP, Amdocs and Comverse Technology were named as potential buyers.

“Amdocs has $1.2 billion in cash and it would cost them more than they have in cash for Telcordia. It would be a huge deal for them in terms of size and integration effort,” said Scott Donahue, vice president and senior analyst, management and automation at Tier 1 Research. Donahue said that SAIC shopped Telcordia around before but pulled back when new SAIC CEO Ken Dahlberg came to the company in November of last year and re-committed to keeping Telcordia. “If they sell, their strategy has changed,” he said.