Comverse Technology Inc. (Nasdaq: CMVT) said Wednesday it will buy Exalink Ltd., a privately-held Israel-based firm for about $480 million in stock.
Shares in Comverse, which makes software for voice mail and other multimedia communications, closed at 91 1/4 Monday. Comverse beat expectations in its first quarter.
Comverse will issue about 5.26 million new shares to Exalink shareholders -- making the deal worth about $480 million based on Comverse's closing price Monday -- and assume the company's outstanding options and warrants. The acquisition is a tax-free, stock-for-stock transaction, which will be accounted for as a pooling-of-interests.
One-time charges for acquisition-related costs are expected to be under $15 million. Excluding the one-time charge, Comverse expects the deal to dilute earnings by about 4 cents a share for the remainder of fiscal 2000, and by 8 cents a share in fiscal 2001. The deal is expected to add to earnings thereafter.
Comverse is buying Exalink for its router-based WAP (Wireless Application Protocol) software. The company's mobile Internet platform has patent-pending technology, including a WAP gateway that delivers Web content to all types of wireless devices, over both WAP and IP protocols.
WAP is among Wall Street's favorite buzzwords these days, and Comverse is moving to keep up with its rivals' penchant for acquisitions. Its competitors include Lucent (NYSE: LU), Nortel (NYSE: NT) and NICE Systems (Nasdaq: NICE), according to Hoover's Online.