Private Investors to Acquire Tekelec for $780 Million

A consortium led by Siris Capital Group has proposed to acquire Tekelec for approximately $780 million, or $11.00 per share in cash, representing an 11% premium over the closing price on November 4, 2011, and a 38% premium over the 30 day trading average.


Last month, Tekelec announced a $20 million Diameter Signaling Router related order, the largest Diameter Signaling Router order in its history.

Following the buyout, Tekelec's management team is expected to remain in place, and Merle Gilmore, former President of Motorola's Communications Enterprise and Chairman of the Board of Airvana Network Solutions Inc., will serve as Tekelec's Executive Chairman following the closing.


"Tekelec presents a unique opportunity to acquire market leading products in the Signaling, Policy, and Diameter Routing markets, a global customer base that includes 16 of the top 20 wireless service providers, and a highly skilled employee workforce,�? said Merle Gilmore. “We will continue investing in and building on Tekelec's reputation for innovation, scalability and reliability to extend the company's mobile data products to new markets and applications."


Separately, Tekelec reported Q3 2011 revenue of $106.2 million, down 2% compared to $108.3 million for the third quarter 2010. Orders were $67.9 million for the quarter, down 16% from the same period in 2010. The orders decline was across both the Global Signaling Solutions and Broadband Network Solutions business units. GAAP gross margins for third quarter 2011 were 60% compared to 55% in third quarter 2010. On a GAAP basis, the Company reported earnings for third quarter 2011 of $0.8 million, or $0.01 per diluted share, compared to a net loss in third quarter 2010 of $0.1 million, or ($0.00) per share. GAAP operating margins were 4% for third quarter 2011 up from 0% for third quarter 2010. Included in the company's third quarter 2011 GAAP operating results is a restructuring charge of $5.2 million.
http://www.tekelec.comTekelec's integrated Home Subscriber Server (HSS) address resolution database and its LTE Diameter Signaling Router (DSR) have been deployed by a tier-one North American Service Provider. This allows the service provider to scale LTE services by routing Diameter messages to the appropriate HSS in the network.


Tekelec's LTE products include:


Home Subscriber Server which serves as the central authentication and mobility management point in LTE Evolved Packet Core and IMS networks, and supports the latest 3GPP standards, including Idle-Mode Signaling Reduction. The HSS is an application on Tekelec's Subscriber Data Server, which also includes the Subscriber Profile Repository (SPR), the Equipment Identity Register (EIR), the next-generation Home Location Register (ngHLR) and an HLR-proxy to ensure seamless 3G/LTE services and device management.


Diameter Signaling Router, which scales and manages services and applications in LTE core networks for hundreds of millions of subscribers. The DSR centralizes routing, traffic management and load-balancing tasks associated with Diameter traffic.


Policy Server, a Policy and Charging Rules Function (PCRF) that integrates with the HSS and acts as the brain for policy coordination, dynamic bandwidth control, charging, consumption and other factors for a subscriber's entire data session.


Performance Intelligence Center (PIC), a performance management system that converts network traffic information into useful business intelligence for service providers to improve the customer experience. The PIC integrates with the DSR to eliminate the need for additional probes and network elements to analyze how subscribers are using IP-enabled devices and applications. In addition, Tekelec added the PIC troubleshooting features to the core DSR platform to continuously monitor the DSR's performance.


Each of these products runs on Tekelec's EAGLE XG middleware platform, built to meet the core network scalability needs of the world's largest networks.