Telesens, the Cologne specialist for internet and broadband billing, is poised to merge with the fast-growing Edinburgh software company KSCL, provider of billing solutions for mobile-based and fixed line telephony. The new company, to be called TelesensKSCL, will be the largest for billing systems in Europe, with a targeted annual turnover of 120 million euros and huge potential for growth.
Telesens agreed to pay £129m for the business which made pre-tax profits of £5m in the last year. Under the terms of the takeover deal, six senior managers and 600 staff at KSCL are set to share £23.5m in cash and shares .
With Telesens’ internet and content-based systems and KSCL’s mobile systems, content-based billing for UMTS and internet usage will now be possible using a single convergent modular software platform.
Telesens CEO, Genadi Man, commented: “Telesens and KSCL fit together perfectly. In KSCL we have found a partner with over fifteen years’ experience in the billing market. The combination of our systems guarantees us a top position in content billing for new services such as UMTS and GPRS.”
Man went on to say: “Together we will be one of the very few billing companies in Europe with the ‘big three’ carriers Deutsche Telekom, British Telecom and France Télécom as our customers.”
KSCL CEO Michael Lacey added: “Telesens gives us exactly what we need – know-how in the areas of IP and broadband billing, as well as a state-of-the-art rating engine. Together, we’re unbeatable.”
Commenting on the announcement, Grant McGregor, portfolio director with 3i, said: “This deal is great news for KSCL. Telesens is a business with exciting technology and there is an excellent complementary fit between the two organisations. Together they should be a powerful force in the telecoms billing arena.”
“We are committed to investing in Scottish technology companies capable of competing globally, and have been delighted to have supported KSCL to achieve this.”
The value of the transaction will total 225 million euros, and the new company will employ 1,200 people.
As one of the first providers of a usage-based billing system for broadband services such as ATM, Telesens is among the world leaders in innovative billing technologies. Telesens AG has development centres in Cologne, Munich, Israel, and Ukraine as well as representative offices in Great Britain, Switzerland, the Netherlands, Malaysia, Japan and New York. CyberSolutions GmbH (Munich) and Telecrypt GmbH (Cologne) are subsidiaries of the Telesens Group.
Edinburgh-based KSCL was founded in 1965 as Systems Consultants Limited (SCL). After being taken over by Kingston Communications plc in 1991 the name was changed to Kingston-SCL, finally becoming KSCL Limited in 1999 following an MBO funded by 3i plc, Royal Bank Development Capital, former parent company Kingston Communications, and the management and employees.
The company has over 800 employees working at locations in Edinburgh, Leeds, Munich, Paris, Hong Kong and New Delhi. Forty telecommunications companies worldwide use KSCL’s systems. KSCL customers include France Télécom Mobiles, BT Cellnet, Panafon, Telsim, and Radiolinja.
KSCL’s main focus is on the development and marketing of complete telecoms solutions, particularly for mobile providers. KSCL’s product, Jupiter, is a leading convergent billing system supporting state-of-the-art technologies such as IP, WAP, GPRS and, in the future, UMTS.
David Giffin, director of Royal Bank Development Capital, said: “We are delighted that such a strong strategic fit has been achieved which gives the combined business such a strong platform in technology, resources and customers. The ongoing development of KSCL from its Scottish base into the international communications market is a great achievement”
Kingston Communications chief executive Steve Maine said: “The combination of Telesens and KSCL will constitute a formidable European telecoms and Internet software competitor. By taking a combination of cash and Telesens shares as consideration, Kingston has not only secured immediate value and funding for our growth plans, but we will also share in the value creation which I confidently expect to see in the enlarged Telesens.”