Syniverse expands international footprint with BSG acquisition

Syniverse has agreed to acquire the wireless clearing and financial settlement business of Billing Services Group for approximately $290 million in cash. The deal would add a strong financial settlement business to Syniverse’s data clearing and network services portfolio.

BSG has a strong GSM data clearing expertise and presence in the European, Middle Eastern and Asian markets and is considered by many, according to Tony Holcombe, president and CEO of Syniverse, to be the market leader with 180 mobile operator customers around the world.

“From our perspective, the rationale is we strengthen our position in the marketplace on data clearing side and pick up an excellent asset on the financial clearing side. Where we see this market going, this combination positions us to be a market leader going forward,” Holcombe said.

The companies will find operational synergies in their data clearing businesses, but BSG’s financial clearing platform will be a new product for Syniverse. The company also will add new wireless services and additional product development expertise through the transaction, which Holcombe said would position Syniverse to better serve the increasingly complex needs of its global wireless customers and be a leading services provider to mobile GSM operators.

Although the companies will integrate their data clearing platforms and look for financial synergies there, Holcombe said Syniverse intends to maintain its European headquarters in The Netherlands and its European operations in BSG’s facilities in Germany and the United Kingdom. Holcombe said BSG has a solid reputation in the industry and wins strong praise for customer services and development. “The people were the most critical asset in this transaction,” he said.

Atul Devani, CEO of BSG Wireless, said the combined organization will be a premier services provider to mobile operators worldwide.

For Syniverse, the deal is expected to be accretive in 2007 and is expected to close within two to six months. More detail on the financial performance of this division will be supplied when the deal closes.

Holcombe said the companies had already begun planning for their integration and will begin as soon as the deal closes. “We are confident we will integrate seamlessly,” he said. “I believe once the transaction is approved, we have the premier Open Connectivity solution.”
Open Connectivity is an initiative launched by the GSM Association in April 2005. Its goal is to simplify roaming and inter-working agreements between operators.

Committed financing is being provided by Lehman Brothers in conjunction with Deutsche Bank and Bear, Stearns & Co. In addition, Deutsche Bank and Bear, Stearns & Co. served as strategic advisors to Syniverse on the transaction. Kirkland & Ellis LLP and Ernst & Young also advised on the transaction.