Once recognized as the world’s largest smartphone maker, Nokia is now betting heavily on its network and communications business. The Finnish giant has today announced its intention to acquire Comptel in a whopping $370 million (or 347 million euros) transaction. Nokia is looking to compete with other network majors and establish itself as a prominent software company.

For the said acquisition deal, Nokia is offering to pay 3.04 euros (approx $3.25) in cash for each Comptel share. The software giant has been trading on NASDAQ for the 17+ years. The Finnish giant is ready to pay a massive 28.8 percent premium over the closing price of the shares on February 8. Nokia further believes that the Share Offer Price

Nokia further believes that the Share Offer Price “reflects an attractive premium over Comptel’s current and historical share prices.” And it has also considered potential dividends while setting the price. An update on the offer will be published on February 24, whereas the offer under the tender is expected to commence at the end of this month and will continue for approximately four weeks.

Talking about the ideology behind this acquisition, the official blog post reads,

The planned acquisition is part of Nokia’s strategy to build a standalone software business at scale by expanding and strengthening its software portfolio and go-to-market capabilities with additional sales capacity and a strategic partner network.

Founded in 1986, Comptel is a Finland-based software company which specializes in building mobile communication solutions for telecom carriers. The company has three decades worth of experience and operates out of offices in twenty locations including Malaysia and U.K. It operates globally and extends its software services to more than 300 operators across 90 countries. This includes more than 1.2 customers.

Over the past couple of years, Nokia and other networking hardware giants were struggling to find their footing in a demanding 4G-focused expansion. And the dawn of next-generation 5G network is still years out. So, the company is beefing up its software prospects to now build additional revenue streams. Also, it is now planning to accelerate its software technologies to make their networks more intelligent.

Talking about the acquisition, Bhaskar Gorti, president of Nokia’s Applications & Analytics business group said,

Nokia is committed to building its software business and is backing its commitment with strategic investments. The timing of the Comptel purchase is important as our customers are changing the way they build and operate their networks.

They are turning to software to provide more intelligence, automate more of their operations, and realize the efficiency gains that virtualization promises. We want to help them by offering one of the industry’s broadest and most advanced portfolios. Comptel helps us do that.

Further, Comptel adds that the offer put forward by Nokia has been unanimously accepted by the company’s Board of Directors. They hold nearly 48 percent of the shares in the company. Now, they’re recommending their shareholders to reflect on the potential strategic value of this merger and vote in the favor of the same. Continuing to talk about the acquisition, Juhani Hintikka, President and CEO of Comptel says,

Together with Nokia we would create an agile and innovative player which can challenge current market leaders head-to-head. Throughout the past fiveyears we have been working hard to sharpen our thought leadership and competitiveness by rebuilding the brand, product portfolio and values driven culture.

I am 100% confident that we are now capable, ready and passionate to take the next step in scaling and expanding our business beyond the ordinary with a new set of resources that Nokia would provide us. 

Also, Nokia believes that Comptel’s solutions in the developing Operations Support Systems (OSS) market will enable them to bolster their software portfolio. This will bring catalogue-driven service orchestration and fulfillment, intelligent data processing, customer engagement, and agile service monetization solutions under their brand. Comptel’s acquisition will also allow Nokia to take aim at carriers who’re looking to automate their network and business operations through cloud-based solutions.

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