BNP Paribas and Lehman Brothers within the next few weeks will launch syndication of a $400 million loan backing CSG Systems International's acquisition of the billing and customer care assets of Lucent Technologies.Peter Kalan, cfo and v.p. of finance, said CSG has fully committed bank funding and the credit lines should carry spreads of between 2-3% over LIBOR. It could not be ascertained whether the banks bid for the business or if the loan is fully underwritten. Officials at both banks did not return calls.
Ashwin Shirvaikar, an analyst at Salomon Smith Barney, said the acquisition price is very attractive. The $300 million cost is 1.5 times revenue and compared to previous acquisitions by other companies, this is low, Shirvaikar added. CSG, which provides customer care and billing solutions for converging communications companies, had no debt on the balance sheet prior to the acquisition.