NSN agrees second sale in a week
Nokia Siemens Networks has announced yet another sale of its non-core assets, days after the last divestment. The target this time is its business support systems unit.
In a statement released Wednesday, the struggling telecom equipment joint venture said it has agreed to sell its BSS business to Redknee for up to €40 million.
Redknee will pay €15 million in cash at closing, plus a maximum of €25 million for certain performance-based cash earn-outs.
About 1,200 staff – mainly based in Berlin, Germany; Bangalore, India; and Wroclaw, Poland, would transfer to Redknee. The Canada-based billing and charging vendor will also take over most of NSN’s BSS customer and supplier contracts, intellectual property rights, fixed assets and associated liabilities.
The planned acquisition, which is expected to close by the second half of 2013, will bring Redknee a complementary global footprint that spans more than 90 countries, including Europe, Asia Pacific, the Middle East and Africa.
Justin van der Lande, Analysys Mason’s senior analyst leading revenue management research program, said the deal makes sense for both companies.
“NSN needs to sell this asset to ensure that on-going speculation over NSN in the market doesn’t result in the loss of customers, staff and value of the business, like a melting ice cream on a sunny day," van der Lande said.
“Size is critical in the long term success of a company in this market, growing through acquisition opposed to organic growth delivers an acceleration to the process. The acquisition will give Redknee the elusive Tier 1 credibility and customers they have been searching for, and gives them a significant boost to their global reach.”
The deal is NSN’s second divestment of non-corea ssets this week, after the company announced on Monday it will sell its optical business to private investment firm Marlin Equity Partners.
By no coincidence, co-parent Nokia has agreed to sell its headquarters in Espoo, Finland to Exilion for €190 million. The company will continue to operate within the premises as previously, but it'll be on the basis of a new long-term lease.
Commenting on the sale, Nokia CFO Timo Ihamuotila said: "We had a comprehensive sales process with both Finnish and foreign investors and we are very pleased with this outcome. As we have said before, owning real estate is not part of Nokia's core business and when good opportunities arise we are willing to exit these types of non-core assets. We are naturally continuing to operate in our head office building on a long-term basis."