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Lucent acquires Kenan
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January 11, 1999: 7:55 a.m. ET
$1.48B stock swap transaction brings billing software to telecom maker
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NEW YORK (CNNfn) - Lucent Technologies said Monday it is buying Kenan Systems Corp., a privately-held publisher of third-party billing and customer care software, for about $1.48 billion in stock.
Lucent (LU) said the software Kenan makes allows telecommunications service providers to use one program to produce a customer bill, regardless of how many different types of telephony services the customer has.
"The right billing and customer care offering is becoming a passport to selling integrated solutions in a communications market expected to grow 25 percent annually to $26 billion by the year 2000," said Dan Stanzione, Lucent's chief operating officer. "We weren't a player in this space, so we decided to jump to the head of the pack by acquiring the hottest player in the business."
Under terms of the transaction, Lucent will swap 12.88 million shares of its stock for Kenan. The transaction is expected to add to earnings in the current fiscal year after being completed by March 31.
Lucent shares closed Friday down 1-1/4 at 115-1/4.
The announcement of the Kenan deal comes amid reports that Lucent is close to announcing a more than $16 billion takeover of computer networking firm Ascend Communications (ASND).
The deal in the rapidly growing market for data networking and telecommunications equipment has been the subject of speculation for months, and could be announced as soon as Wednesday. The buyout would create a company able to challenge market leader Cisco Systems (CSCO). 
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