Japan's NEC weighs offer for software provider CSG Systems, sources say

NEC

29/01/2025 15:07

By Milana Vinn
       NEW YORK, Jan 29 (Reuters) - Japanese technology group
NEC Corp  6701.T  has been talking to its advisers about the
possibility of making an offer for CSG Systems  CSGS.O , which
provides customer care and billing solutions for cable and phone
companies, according to people familiar with the matter.
    Tokyo-based NEC has been working with investment bankers at
Morgan Stanley on a potential offer for CSG, which has explored
a sale over the past year, the sources said, requesting
anonymity as the discussions are confidential. 
    The deliberations between the companies are at an early
stage, the sources said, cautioning that a deal is not
guaranteed and it's possible that NEC would decide not to submit
a formal bid for CSG, which has a market value of $1.6 billion.
A different suitor for CSG could also emerge, the sources added.
  
    NEC and CSG declined to comment. Morgan Stanley did not
immediately respond to requests for comment. 
    Englewood, Colorado-based CSG provides software and business
services to telecommunication providers globally, helping them
manage functions such as revenue management, customer
experience, and payments. Its customers include Comcast
 CMCSA.O , Charter Communications  CHTR.O , Dish TV, and MTN
Group, according to its website.
    Earlier in January, CSG said its current chairman Ron Cooper
would step down from his role at the end of his term in May and
will be succeeded by another board member Marwan Fawaz, a
veteran technology industry executive.
    CSG has been battling to latch on its market share, as large
telecommunications customers have been trying to cut costs as
they look to prioritize hefty investments on infrastructure
required for 5G deployment. 
    In its most recent quarterly earnings report, CSG posted a
3% growth in revenue to $295.1 million, buoyed mainly by a
strong performance from its customer experience and payments
units. The company also extended its contract with Comcast,
which is its biggest customer and accounts for a fifth of its
revenue. CSG is scheduled to report its fourth-quarter results
on Feb 5. 
    Founded in 1899, NEC is a provider of information technology
and network communications, cloud computing, artificial
intelligence, the internet of things, and telecommunications
equipment and software. NEC, which has a market value of 3.67
trillion yen ($23.62 billion), was once the world's biggest
maker of semiconductors but has since pivoted to focus on areas
such as IT services. 
    
($1 = 155.3600 yen)

 (Reporting by Milana Vinn in New York; Editing by Chizu
Nomiyama)
 ((mailto:Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno;
Reuters Messaging: Signal/Telegram/Whatsapp - +1-646-705-9409))