Transaction

Advised: Marconi PLC on its acquisition of Mobile Systems International (MSI)

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Deal summary

Marconi, a British Telecoms equipment manufacturer acquired Mobile Systems International, a provider of software for wireless phone operators for $618 million.

  • Marconi paid US$618 million (£391 million) for the MSI shares, comprised of US$310 million (£196 million) in cash and US$308 million (£195 million) in new Marconi shares.
  • In addition, US$104 million (£66 million) of in-the-money options and warrants was rolled over into new Marconi options.
  • The value of the employee option package increased by a further US$179 million (£113million) subject to continuing employment of MSI employee option holders including senior management. The majority of this value were only to be realised if certain performance criteria, including synergy targets, were met.
  • The transaction was subjected to regulatory approvals and other customary conditions and was completed in June 2000.
  • The number of Marconi shares issued in respect of this transaction was determined based on the Marconi 5 day average share price immediately prior to completion.

About Marconi PLC

Marconi Communications, the former telecommunications arm of Britain's General Electric Company plc (GEC), was founded in August 1998 through the amalgamation of GEC Plessey Telecommunications (GPT) with other GEC subsidiaries: Marconi SpA, GEC Hong Kong, and ATC South Africa.

In December 1999, it became the principal subsidiary of Marconi plc, formed by renaming the remainder of GEC when GEC's defence arm, Marconi Electronic Systems, was sold to British Aerospace to form BAE Systems. Marconi plc was restructured to Marconi Corporation plc in May 2003.

Marconi Corporation used the cash raised by selling the defence arm to buy US telecoms companies, with the aim of becoming a major telecommunications systems provider. After losing most of its value in the subsequent dot-com bubble crash, and failing to win major contracts, in 2006 Ericsson acquired a majority of Marconi Corporation. The remainder of Marconi Corporation was renamed Telent.

About MSI

Mobile Systems International has a rich history in Telecommunications & Security spanning both Defense & Commercial systems and networks.

Established in 1989 in London, UK, it has grown its International presence with Operations in Europe, Middle East and Africa. Its experience and expertise is far reaching covering areas such as network evolution, spectrum harmonisation, network automation, network analytics, IoT, connected living, network security, private and government networks.

"The opportunities generated by this combination are very exciting and I am confident the sales synergies we realise will be multiples of MSI's current revenues. MSI takes Marconi further up the value chain in network services and wireless and equally importantly brings a team of top flight telecom professionals who are dedicated to providing high level software solutions to their clients. I look forward to working with Tom Butler and his team to realise these substantial opportunities.”
George Simpson Chief Executive, Marconi
  • Deal value

    $618m

  • Location

    London, UK

  • Sector(s)

    Technology, Telecoms

  • Deal type

    Acquisition

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