Oracle buys Israeli start up Convergin

The price is estimated at $80-90 million for the company.

Oracle announced this afternoon that it was buying Israeli start up Convergin. The announcement did not mention the price, but according to industry estimates it is of the order of $80-90 million, a fair achievement for a company in which just $13 million has been invested.

Convergin was founded in 2000 by Dr. Ayal Itzkovitz, president and CEO of the company. It provides service broker and service capability interaction management telecommunications network solutions.

The link with Oracle began about a year ago with an OEM agreement, but at a certain stage Oracle decided to move ahead and offer to buy the company. "Oracle is the ideal player," says Pitango managing general partner Rami Beracha. "After buying Sun, it has a software and hardware products framework, and it wants to eneter the telecommunications world. The match with the company's products is very successful."

According to Beracha, Convergin has been profitable since 2002. It had sales of $15 million in 2009, and a cash surplus. The only thing Beracha would say about the acquisition price is that "the multiple on the investment is very good."

In its announcement, Oracle said that "the combination of Oracle and Convergin is expected to provide a single carrier-grade, standards-based IT platform allowing CSPs to effectively evolve their service delivery capabilities at a lower total cost of ownership."

The transaction is expected to close the first half of this year.

This is Oracle's third acquisition in Israel, and its most expensive. In September 2009, it bought HyperRoll Inc., which develops what are known as financial reporting acceleration solutions, for what is believed to have been a low amount. In 2006, Oracle bought planning solutions company Demantra for a reported $41 million, and set up a local development center.

Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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