Amdocs is thinking of buying rival Mind CTI at $110m company val

Amdocs is thinking of buying rival Mind CTI at $110m company value
By TheMarker.com Staff 05/14/01 - 08:51 AM EDT

Loading Comments...
Add Comment Amdocs (NYSE:DOX) is considering acquiring rival billing and customer care software developer Mind CTI (Nasdaq:MNDO), TheMarker.com has learned.
More on TheMarker.com
Private US investors interested in Discount BankClal Insurance fires senior supervisor suspected of embezzlement, theftIDB takeover negotiations officially endIndustrial Building writes down NIS 24 million on holdings in IDBEmblaze, Tadlys selling joint bluetooth product to European cellular providerMutual funds erase most of NIS 2.6 billion February deposits in one weekBank of Israel: Monetary council bill could lead to lower credit ratingCommunications Ministry to allow Bezeq to take over satellite TV firm YESPartner to raise $150 million overseasNessuah Zannex: Serono entry into MS-drug field will hurt Biogen, not TevaOne reason is simply that Mind CTI is going cheap. Its market value is $53 million, compared with $290 million at its peak. Amdocs is reportedly willing to fork over $110 million, double the company's market cap.
Amdocs' market cap is $13.8 billion. Moreover, it can pay. Amdocs is sitting on $468 million cash.
It is now known whether Amdocs is offering cash or shares.
Market sources say Mind CTI executives are undecided about Amdocs' offer because it is $100 million below Mind CTI's value at IPO in August 2000.
Mind CTI Chairman, President, CEO and founder Monica Eisinger said that buyout offers are common when a company's stock plummets. But she said that so far nothing concrete has come along, and denied that Amdocs had tabled a bid.
"We're a strong company currently in a slump due to the telecoms crisis," she said, but noted that Mind CTI has a lot to offer: more than 100 customers and a strong foundation. The company won't be pouncing on just any offer, she warned.
Amdocs arms against Portal Software

Mind CTI specializes in billing and customer care (B&CC) for IP-based networks. Amdocs traditionally focused on the circuit-switch communications networks.
During 2000, Amdocs paid $1 billion for the Canadian company Solect, in order to compete with the American IP-billing company Portal Software (Nasdaq:PRSF). Solect brought Amdocs into a new sphere, namely IP solutions.
Buying Mind CTI could further expand Amdocs' product line for IP billing. But it probably does not actually need its smaller colleague strategically. It wouldn't even help the giant reduce its time to market of new products.
Mind CTI recently acquired the VeraBill product line of Veramark Technologies (Nasdaq:VERA) for a relatively low $1 million in cash. VeraBill technology enables Mind CTI to connect to cellular and standard exchanges.
Other pluses include Mind CTI's attractive customer base and $40 million in cash.
Two weeks ago, Mind CTI announced its results for the first quarter of 2001, which it had prewarned would be low. Revenues dropped to $2.6 million, 19% below the first quarter of 2000 and 43% less than the fourth quarter of 2000.
Mind CTI has been profitable since it was founded, until now. For the first quarter of 2001 it posted $1.1 million losses or 1 cent per share.