NEC to acquire NetCracker for $300 million

NEC will acquire NetCracker, a U.S. software vendor focused on helping communication network providers roll out new services, for about US $300 million, the companies announced Friday.

The acquisition will help Tokyo-based NEC to expand its offerings to providers of Internet, broadband network and large-business services, the companies said. With the acquisition, NEC will add key software and services in the area of operations support systems to its mobile and fixed infrastructure products, NEC officials said.

NetCracker, a 15-year-old company based in Waltham, Massachusetts, helps ISPs (Internet service providers) roll out so-called "triple play" voice, video and Internet services, including VoIP (voice over Internet Protocol) and IP-based television service.

The company also helps providers deliver data services on multiple types of networks, and it offers customer-relationship services to network providers. The latter is an important service to have in the current competitive market, NEC officials said.

"The service fulfillment is an absolutely critical strategic component of data transformational activities," said Andrew Feinberg, CEO of NetCracker. "As we look at what's happening in the market today, with the convergence of networks and IP ... it becomes very clear that the rapid delivery of new services is arguably the most important part of that transformational strategy."

The two companies' products are "complimentary," with NEC having a strong presence in Asia and Latin America and NetCracker focused on North America and Europe, Feinberg said during a press conference.

"Together, we will be able to bring one of the broadest portfolios in the world to enable our customers, communications service providers, to become more competitive," he said.

Among NetCracker's customers are Sprint Nextel and France Telecom.

Through the acquisition, NEC expects to generate US $1.9 billion (200 billion yen) in new sales over the next five years through services for international carriers, the company said. NEC is a diversified technology vendor, with services to network providers a large part of its business.

The companies expect the deal to close within 90 days. NetCracker will operate independently once it is acquired.

The IDG News Service is a Network World affiliate.