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UPDATE 1-NEC to buy U.S. software firm for $300 mln
June 27, 2008 / 8:33 AM / 9 years ago

UPDATE 1-NEC to buy U.S. software firm for $300 mln

(Adds details, background, share price)

TOKYO, June 27 (Reuters) - Japan’s NEC Corp (6701.T), faced with a slow-growing home market, will acquire U.S. software company NetCracker Technology Corp for about $300 million to expand its overseas IT systems and network operations.

The telecom equipment firm aims to raise sales of its network business by 200 billion yen ($1.87 billion) over the next five years through the acquisition of NetCracker, which designs network interfaces and communications services.

“To speed up growth, organic evolution is not enough, and M&As are necessary,” NEC President Kaoru Yano said at a news conference. “We will continue to consider M&As to gain economies of scale.”

NEC, which also makes PCs and mobile phones, agreed in February to form a joint venture with Alcatel-Lucent ALUA.PA on next-generation wireless networks and products, called long-term evolution (LTE) for customers like Verizon (VZ.N).

NEC supplies equipment to Nippon Telegraph and Telephone Corp (9432.T) and its mobile unit NTT DoCoMo (9437.T), which are also searching for new revenues in a saturated domestic market.

NEC and NetCracker aim to complete the deal in September.

Prior to the announcement, share of NEC closed down 3.1 percent at 556 yen, compared with the benchmark Nikkei average's .N225 2 percent fall. (Reporting by Mayumi Negishi; Editing by Chris Gallagher)

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