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Telecommunications systems

Lucent Technologies Acquires Kenan Systems for $1.48 Billion

Strategic Insights

— 1 min read

Lucent Technologies, the world's largest telecommunications equipment manufacturer, has made a significant move in the rapidly consolidating market for telecommunications equipment. The acquisition of Kenan Systems, a leading maker of telephone billing and customer care software, for $1.48 billion is a strategic move to target the fastest-growing parts of the telecoms market. This deal comes as Lucent investors are digesting the news of a possible merger with Ascend Communications, a US data networking group. The acquisition is expected to enhance Lucent's offerings to telephone companies, allowing them to provide complete services to corporate customers, handling both traditional telephone calls and computer data traffic.

Key Takeaways:

  • Lucent Technologies has acquired Kenan Systems, a leading provider of third-party billing and customer care software, for $1.48 billion.
  • The communications software market is growing at 25% per year and is expected to be worth $26 billion in 2000.
  • Kenan Systems is the leading provider of third-party billing and customer care software, a market growing at 30% per year.
  • The acquisition of Kenan Systems is a strategic move to target the fastest-growing parts of the telecoms market.
  • Dan Stanzione, chief operating officer at Lucent, stated that billing and services software is the area where telephone companies have the greatest need for better products.
  • Lucent is interested in acquiring data networking businesses to complement its existing product offerings.
  • The deal is expected to enhance Lucent's offerings to telephone companies, allowing them to provide complete services to corporate customers.
  • Kenan Sahin, president and sole owner of Kenan Systems, will join Lucent and help with product development.

Statistics:

  • Lucent Technologies acquired Kenan Systems for $1.48 billion.
  • The communications software market is growing at 25% per year and is expected to be worth $26 billion in 2000.
  • Kenan Systems is the leading provider of third-party billing and customer care software, a market growing at 30% per year.
  • Ascend Communications' share price closed up $5 1/4 at $76 11/16, giving it a market capitalization of over $16 billion.
  • Lucent shares fell $2 5/16 to $112 15/16.
  • Shares in Alcatel, the French telecoms manufacturer, fell 8.70, or over 5%, to 115 on the news of the link-up.

Sources:

  • Financial Times
  • Lucent Technologies press release

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