Fixed Mobile Convergence

New innovations are being made in the telecommunications industry every day, and the market scenario is changing rapidly. Subsequently, these quick transformations in the market are resulting in new alliances and acquisitions among industry players.

Tangoe, Inc., a provider of Communications Lifecycle Management or ‘CLM’ software services and solutions, has announced that it has successfully completed the acquisition of ProfitLine (News - Alert), Inc.; a company that offers telecom expense and mobility management services. The transaction had been closed on Dec.19, 2011.

CLM covers the comprehensive lifecycle of the communications assets and services of a company, such as planning and sourcing, procurement and provisioning, inventory and usage management, invoice processing, expense allocation and accounting and asset decommissioning and disposal. The Communications Management Platform or ‘CMP’ offered by Tangoe (News - Alert) is an on-demand software solution that conveniently manages the lifecycle for both fixed and mobile communications assets and services.

ProfitLine enables enterprises to handle the fixed and mobile telecom expenses, mobile devices, communications services and carrier relationships in a streamlined manner. The company also offers sourcing, inventory, device and expense management solutions to various organizations and suppliers of communications products.

According to the terms and conditions of the new development, Tangoe will pay around $23.5 million in cash to ProfitLine. Out of this amount, $14.5 million had been paid upon closing, while $4.5 million will be paid in 12 months. Remaining amount of $4.5 million will be paid within duration of 18 months.

“We are very excited to announce the acquisition of ProfitLine, which we believe is among the largest independent CLM providers behind Tangoe. The addition of ProfitLine expands our customer base, broadens our vertical coverage, and provides an attractive cross-sell opportunity as we leverage Tangoe’s broader global footprint,” commented Al Subbloie (News - Alert), president and chief executive officer at Tangoe. “Tangoe has a proven history of complementing our organic growth by successfully identifying and integrating acquisitions, which we believe is among the core competencies that made us an industry leader.”

With the new acquisition of ProfitLine, Tangoe expects to receive an added contribution of around $0.4 million in revenues during the fourth quarter of 2011, while the company doesn’t deem it to be having any substantial impact on non-GAAP profitability. Further, it expects ProfitLine will contribute approximately $14 million to $15 million in revenue and will also be slightly accretive to non-GAAP net income per share during the whole year 2012.

Recently, Tangoe, Inc. announced that it has acquired privately held Anomalous Networks, a leading provider of Real-Time Telecom Expense Management or ‘rTEM’ software solutions.

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