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Tekelec pays nearly $40M to acquire Dutch texting technology firm

Tekelec's Frank Plastina

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Telecom gear-maker Tekelec, which is growing its global market share in messaging technology, is buying a company that provides some of its “secret sauce.”

Tekelec (Nasdaq: TKLC) said Wednesday it would buy privately held mBalance in a deal worth some $40 million.

The price could reach close to $60 million if sales benchmarks are reached over the next two years.

Based in the Netherlands, mBalance provides software that helps enable Tekelec’s texting technology in its TekMedia product.

MBalance, which has 82 employees, works with 48 mobile network providers in 38 countries. The seven-year-old firm works with Tekelec in nine countries across 10 network deployments.

“This acquisition demonstrates the company’s commitment to grow our solutions portfolio and market opportunity by moving into adjacent spaces that build on our core competencies,” said Frank Plastina, Tekelec’s chief executive officer.

Tekelec has emerged as a global leader in messaging technology, enabling customers to handle more messages faster and improving network performance.

The company has made texting a major focus, given the fact that texting is the second-most-popular usage of mobile phones next to voice. Tekelec cited data from Portio Research to show texting is expected to reach nearly 5 trillion messages by the year 2011, up from 3.5 trillion today.

“MBalance is a well-managed company with unique technology,” Plastina said.

He also pointed out that the company has generated positive cash flow since 2005.

Tekelec made the buy through its Belgian-based subsidiary, Tekelec International.