Home Nokia Nokia to buy software firm Comptel: valued $370 million

Nokia to buy software firm Comptel: valued $370 million

Licensing brand for smartphones, Nokia itself is getting into software business now

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Nokia Hoarding

While we know in smartphone market, Nokia’s brand name is what lives on currently via HMD. Nokia itself has recently announced its plans to acquire its home-country based software firm – Comptel.

Finland based, Comptel is a software firm providing specialised solutions for telecom and mobile carriers. Already a partner to Nokia, the software firm has completed over 1400 projects in more than 90 countries. Providing its services to over 2 billion end-users daily, it processes 20% of world’s mobile usage data everyday. Its biggest customer has around 300 million subscribers.

According to offer, Nokia has valued Comptel at €347 million (~$370 million) that is €3.04 for each share in software firm. “share price offer represents a premium of 28.8 percent versus to the closing price of the shares on Nasdaq Helsinki Ltd. (“Nasdaq Helsinki”) on February 8, 2017.” – said Nokia in a public statement. 51.2 percent compared to the volume-weighted average trading price of the Comptel shares on Nasdaq Helsinki during the 12-month period preceding the date of the announcement of the Tender Offer.”

Considerable element in the acquisition is that Nokia is focusing on providing software solutions to its customers. Until now the technology giant has been providing its telecom equipment worldwide after having its mobile business sold to Microsoft. The Finish firm has also provide the telecom operators worldwide with the solutions as well as the hardware.

Adapting itself to changing world

The acquisition hints towards Nokia’s dedicated focus on software solutions as much as company’s activism in the industry. The Finish technology giant wants to show that it’s adapting the change world (specially its customers) want.

“Nokia is committed to building its software business and is backing its commitment with strategic investments. The timing of the Comptel purchase is important as our customers are changing the way they build and operate their networks.” – said Bhaskar Gorti, president of Nokia’s Applications & Analytics business group. “They are turning to software to provide more intelligence, automate more of their operations, and realize the efficiency gains that virtualization promises. We want to help them by offering one of the industry’s broadest and most advanced portfolios. Comptel helps us do that,” he added.

No Direct Entry into Phone Business

One thing we might consider here that Nokia is not showing any interest getting into its old phone business directly. Which in someway is understandable as the company knows that its name is enough for a smartphone to sell off. So better to stay focused on other major parts of the business.

You can further believe that Nokia itself won’t be presenting any smartphone launch at Mobile World Congress this year. While they are participating the show, they have other things to announce like IoT network grid as a service. There is still a possibility that the company might support HMD continually for the smartphone launches to attract customers.

Dedicated Focus on Telecom Industry with Upgrades

In a statement, Comptel CEO tells that both the companies want would create a player that would challenge the current market leaders. They believe Nokia would provide them with the resources to go beyond what they have currently been.

“Together with Nokia we would create an agile and innovative player which can challenge current market leaders head-to-head. Throughout the past five years we have been working hard to sharpen our thought leadership and competitiveness by rebuilding the brand, product portfolio and values driven culture. I am 100% confident that we are now capable, ready and passionate to take the next step in scaling and expanding our business beyond the ordinary with a new set of resources that Nokia would provide us,” – says Juhani Hintikka, President and CEO of Comptel.

While several major shareholders have already agreed to sell their shares to Nokia which count at 48.3 percent, the deal has yet to close. Only if other shareholders also accept the offer, which in most cases goes well if look at the history of such buyouts.

Nokia will publish an update on the offer on February 24 with detailed information. It’s expected that the Offeror commence the Tender Offer on or about February 27, 2017 that is supposed to run for approximately four weeks.

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