Count Veraz Networks as is the latest, “smallish” IMS/NGN vendor to look to get acquired. As part of its recent Q4 earnings call, the company said it had retained an investment banking firm to pursue the old “strategic alternative” route. Veraz is the latest in a line of smaller vendors going the buy-out route in recent days.
Said Veraz’s President and CEO, Doug Sabella:
Over the past 10 years, we have been reasonably successful in organically building our business. However, this organic success has not allowed us to scale the business to a level that positions us as a significant provider to our customers or as relevant to the investment community. This challenge is always magnified during economic downturns and service providers’ gravity towards large vendors and the investment community does the same.
This reality has driven the Veraz Board to retain the services of Pagemill Partners, a technology investment banking firm to strategically assess alternative paths for maximizing shareholder return and ultimately winning in the market. As a result of this assessment, our Board has concluded that it is in our shareholders’, customers’, and employees’ best interest to pursue strategic options.
The Connected Planet Take, Rich Karpinski:
Veraz had been trying to find some new product avenues, talking to CP about a move into wireless bandwidth optimization late last year. It putting itself on the market (or considering strategic alternatives in financial speak) makes it the latest smallish IP/NGN vendor to be potentially gobbled up recently, following Metaswitch buying AppTrigger and Oracle’s acquisition of Convergin and Amdoc’s purchase of JNetx.
What many of these acquired vendors have in common was that they pragmatically filled a hole in carrier IMS/NGN/VoIP architectures, but couldn’t expand quickly enough (as compared to some competitors, such as Acme Packet) to turn that niche into a full blown market opportunity, especially as larger competitors are now aggressively targeting the same areas. Veraz could be appealing for its core IP technologies as well as a nice group of customers, especially outside the U.S.
That’s our take on this development, let us know what you think in the comments below: