Reuters: Deals: NEC to buy Convergys business support ops for $450 million

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NEC to buy Convergys business support ops for $450 million Mar 22nd 2012, 07:45 TOKYO | Thu Mar 22, 2012 3:45am EDT TOKYO (Reuters) - Japan's NEC Corp (6701.T) said on Thursday it would spend $450 million to buy the business support operations of U.S. telecoms firm Convergys Corp (CVG.N) as it hunts for new telecom equipment sales abroad. NEC, which is slashing jobs as it heads for a net loss, has been struggling with sluggish sales at home and has been hungry for client access abroad to expand sales of its telecom equipment, data centers and other network infrastructure. Convergys, which competes with Amdocs (DOX.N) and Comverse Technology (CMVT.O), had been viewed as an acquisition target after the company mentioned the possible sale of itself or of certain assets in a strategic review conducted in the summer of 2010. [ID:nN17150076] The support operations include billing and client support services. Last year, AT&T Inc (T.N) bought Convergys' interests in two wireless operations in the Cincinnati, Ohio area of the United States for about $320 million in cash. NEC expects to complete the deal by the end of June and will absorb the customer care and billing provider for companies in the United States and Europe into its subsidiary, NetCracker Technology Corp. UBS Investment Bank was the financial advisor for NEC on the deal. NEC plans to post a net loss of 100 billion yen ($1.20 billion) for the year to March 31, due poor performance in its smartphones in a market dominated by Apple's APPL.O iPhone. Inroads being made by foreign rivals into the domestic IT infrastructure business and difficulty in expanding overseas is also hurting the company. Shares in NEC rose 1.8 percent on Thursday, outperforming an 0.4 percent gain in the benchmark Nikkei 225 .N225. The deal was first reported by the Nikkei business daily just ahead of the close of the day's trading. ($1 = 83.6300 Japanese yen) (Reporting by Mayumi Negishi, James Topham; Editing by Joseph Radford and Matt Driskill) Link this Share this Digg this Email Reprints

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