For quite some time the market has been wondering what AudioCodes (Nasdaq: AUDC) will do with all that cash it's been perched on. Now we know: the Lod-based voice-over-Internet company has signed an agreement to buy Nuera Communications, a fellow provider of Voice over Internet Protocol (VoIP) infrastructure solutions for broadband and long distance.
Nuera sells its products throughout North America, Asia and Europe, AudioCodes says. AudioCodes has agreed to pay $85 million cash for the company.
The price is no problem for AudioCodes, which ended the first quarter of 2006 with $228 million cash.
AudioCodes is dual-listed on the Tel Aviv Stock Exchange and Nasdaq. Its present market cap is about $500 million. At present the news is sending its stock up 3% in Tel Aviv.
AudioCodes says the acquisition will strengthen its position in the cable and voice over broadband markets.
Shabtai Adlersberg, chairman, president and CEO of AudioCodes commented in a statement: "We are also pleased to welcome Nuera's employees to the AudioCodes team. Together we will create a more capable, larger scale VoIP equipment provider in North America to serve Service Providers and support our Network Equipment Providers in cable, wireless, and wireline markets and we will offer best of breed media gateway carrier grade products to a wider group of customers."
The agreement includes an earn-out arrangement that could cost AudioCodes an additional $5 million if Nuera achieves certain revenue milestones during the first 12 months after the deal is done.
Following the transaction, Nuera will become a wholly-owned subsidiary of AudioCodes
AudioCodes says the takeover should be consummated at the end of the second quarter, or early in the third quarter of 2006, subject to regulatory approvals and other usual things.
It adds that both its and Nuera's board of directors have approved the merger.