Agilent to acquire OSI

Agilent Technologies continued to extend its reach in the multi-billion dollar OSS space by announcing today its planned acquisition of Objective Systems Integrators (OSI), a provider of network management and service assurance software solutions for communications networks.

A wholly owned subsidiary of Agilent will pay cash for all outstanding shares of OSI stock at $17.75 per share. The deal has received stockholder approval and is expected to close in approximately six weeks subject to Agilent’s receipt of a majority of OSI’s outstanding shares and regulatory approval. The deal is valued at approximately $665 million.

“The Agilent/OSI combination will dramatically strengthen our position in a very high-growth, high-margin market,” said Tom White, senior vice-president and general manager of Agilent’s communications solutions group. “The capabilities we will be able to offer together are essential to enabling communications service providers…to deliver on the promise of next generation communications networks and services.”

California-based OSI was founded in 1989 and had its initial public offering in Dec. 1995. The company has more than 400 employees and over 120 customers in the service provider space. It will become a division within Agilent’s communications solutions group.

OSI’s flagship product is the NETxPERT family of platforms and applications for providing integrated management of service delivery, assurance and usage across multi-vendor networks. Over the last few years, OSI has invested approximately $50 million in its Unified Management Architecture, which offers a model for managing converging wireline, wireless, and IP/data networks and services.

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“These investments have clearly affected their financial results in the last 3 years, however OSI’s performance has increased significantly in recent quarters. In addition, they have maintained and expanded their strong customer base,” White said.

The UMA was built to provide a common platform for integrating and managing large-scale multi-vendor environments. Agilent will integrate OSI’s UMA platform with its acceSS7, accessFiber and Firehunter systems. In particular, Agilent will use its RF and SS7 management tools with OSI’s UMA to deliver integrated solutions to the wireless market.

“Customers desperately need a way to unify their own OSS systems, particularly with those requiring integration as a result of acquisitions and mergers in the telco space. OSI’s UMA does just that,” White said. “It vastly simplifies the integration and management of common network and services in today’s large scale multi-vendor environments.”

Agilent expects OSI to add approximately 1% to revenue growth in the first year and expects its earnings-per-share to be lowered by about two cents in fiscal 2001, which ends in October.