Reston, Va.-based TNS, which provides financial and payment services to telecom companies, has agreed to acquire Seattle-based Cequint for up to $112 million. Cequint provides caller ID-like products to U.S.-based carriers that includes the ability to identify where a user is calling from based on the incoming caller’s area code.
The deal includes an initial payment of about $50 million, consisting of about $46.7 million in cash and about $3.3 million in stock issued to certain Cequint executives. There’s an additional $62.5 million in cash pay-out if Cequint meets future profit targets extending to May 31, 2014. The deal is expected to close in the next three months. Quite impressively, TNS said Cequint is expected to contribute $2 million in revenue in the remainder of the year, and to be neutral to adjusted earnings within 12 months. If all goes well, TNS says the total transaction price will equal “one-times Cequint’s revenue.”
Cequint typically has worked with handset makers and carriers to pre-load the Cequint app on to handsets and then share a portion of the revenues with operators. Today, the software has been distributed to more than 30 million handsets, and has carrier partnerships with Verizon and AT&T (NYSE: T). The company