RadiSys to Buy Convedia

By Erik Linask

Associate Editor,
Internet Telephony magazine

 

With the continual advancement of technology and demand for faster and more powerful technology, increasingly more bandwidth-intensive applications, and the unification of devices and services and applications, communications and networking technology is being reinvented almost daily.  The proliferation of IMS and pre-IMS deployments are forcing developers to account for the future as much as for the present as they roll out new products for their service provider customers.  Two companies at the forefront of several emerging technologies will soon be under a single umbrella, as  RadiSys Corporation has entered into a definitive agreement to acquire privately held Convedia Corporation.

 

Convedia Corporation’s platform products are at the heart of VoIP networks and emerging IMS deployments, enabling telecommunication service providers to deliver a broad range of value-added multimedia services to their residential and business customers.  They enable fixed, mobile, and cable service providers deploying IMS and pre-IMS services to reduce service delivery costs and more rapidly introduce new innovative voice, video, and multimedia services.

 

RadiSys Corporation develops embedded technology that improves communications technology to enable the latest media-rich services and applications.  It is leading the charge for ATCA and other growing technologies.  RadiSys technology powers products from Comverse, Nokia (News - Alert), Nortel (News - Alert), Siemens (News - Alert), and many more of the world’s leading technology companies

 

RadiSys has now entered into a definitive agreement to acquire privately-held Convedia.  The acquisition of Convedia will benefit both companies’ customers bringing together two sets of complementary technologies under one umbrella with an expanded team with greater scale and breadth to fully support customers’ driving needs.  The combined facilities and staff will instantly expand global reach and the ability to service and support customers. 

 

“We believe that IMS/VoIP is an important and growing market and that Convedia’s products and strong customer relationships, together with RadiSys’ ATCA leadership, creates a broader and more compelling portfolio of solutions for our customers across a larger addressable market,” said Scott Grout, RadiSys President and CEO.

 

The addition of Convedia will facilitate RadiSys’ penetration into the VoIP and IMS infrastructure markets and will aid in fulfilling RadiSys’ vision of providing turnkey networking platforms.  Convedia’s Media Servers have been deployed at more than 200 customers around the globe, including half of the top 50 global telecommunication service providers.  Most recently, customer contact specialist West Corporation deployed Convedia’s media servers.  Convedia’s customer traction and revenues have been growing rapidly. —  for the quarter ended June 30, 2006, Convedia achieved annual run-rate revenues of around $20 million. RadiSys currently projects that this business, when combined with RadiSys, will grow to be a meaningful portion of total corporate revenues over the next several years.

 

The entire line of Convedia media servers will continue to be developed and enhanced under the RadiSys corporate brand.  The combined firms also will leverage Convedia’s eXMP (eXtended Media Processing) software technology to operate on RadiSys’ ATCA platforms, which will create even greater opportunities for the combined entity.

 

 

“This is the proverbial win-win for both companies and their customers,” said Peter Briscoe, President and CEO of Convedia.  “Convedia accelerates its business plans through access to a top quality, global sales force and world class expertise in ATCA.  RadiSys enhances its networking platform products by adding market leading IP media processing products and technologies as well as Convedia’s powerful channels and market strength in Asia-Pacific.”

 

RadiSys will pay $105 million in cash, subject to certain adjustments, of course, plus an up to an additional $10 million if Convedia achieves certain profitability goals over the next year.  The transaction has received approval by the boards of directors of both companies and is expected to close by the end of the quarter, at which time Convedia will become a wholly-owned subsidiary of RadiSys.