Redknee surges on Nokia Siemens deal

Redknee Solutions Inc. (TSX:RKN) is buying Nokia Siemens Networks’ business support systems division and acquiring about 1,200 employees in a deal worth up to US$52-million that will expand the Toronto-area company’s global footprint.The acquisition will increase the global footprint of Redknee to more than 90 countries across Europe, Asia Pacific, the Middle East and Africa, the company said. Redknee, based in Mississauga, Ont., provides infrastructure software for mobile networks. Nokia Siemens is a partnership between Nokia of Finland, one of the world’s biggest cellphone makers, and the German industrial giant Siemens.The stock surged as much as 20% to $1.80 in TSX trading Wednesday.“This planned acquisition marks a significant milestone in Redknee’s long-term growth strategy,” Redknee CEO Lucas Skoczkowski said in a news release. “It would add strong long-standing relationships with new Tier1 operators and expand Redknee’s market share and presence in high growth markets.”The Nokia Siemens business support systems division provides real-time charging, rating, policy, and customer service to more than 130 communication service providers, including half of the top 100 global mobile operators.Redknee will pay US$19.6 million in cash plus a maximum of US$32.7 million post closing.  The deal is expected to close in the first half of 2013.Nokia Siemens Network CEO Rajeev Suri said the transaction supports the company’s transformation to a mobile broadband company.Redknee also released its fourth-quarter financial results on Wednesday. Net income increased to US$1.9 million or three cents per share, compared with $700,000 or a penny per share in the same quarter in 2011. Revenue for the fourth quarter remained flat at $14.5 million compared to same year-ago quarter.

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