Ericsson To Buy Billing Software Firm LHS For $417 Million

LONDON (Dow Jones) -- Ericsson said it's agreed to pay 310 million euros ($417 million) for German billing software firm LHS, bolstering its ability to manage the networks of telecommunications companies.

Ericsson said it's offering 22.50 euros in cash for each share of LHS.

LHS shares jumped 11.6% to 22.32 euros in early Frankfurt trade.

Ericsson's already agreed to buy 55% of the firm from LHS founder Hartmut Lademacher as well as from the investment firm General Atlantic. It's also won the backing of shareholders with another 20% of LHS.

The deal will lift earnings for Ericsson starting in 2008, when excluding depreciation of acquired intangibles.

Ericsson said the deal will enable it to better service its customers as they roll out increasingly high-tech offerings over their networks.

"Operators are quickly moving towards convergent charging and billing solutions to enhance their relationship with consumers, improve cost efficiency and limit financial risk. Ericsson and LHS form a strong constellation of prepaid and postpaid solutions ready to immediately capture this opportunity," said Ericsson's chief executive, Carl-Henric Svanberg, in a statement.

In the first quarter, Ericsson generated 23% of its 42.2 billion Swedish krona ($6.1 billion) in revenue from providing services to telecommunications firms. In the last week alone it's agreed to provide services for KPN (KPN) and Vodafone Group (VOD) in Holland.

Shares of Ericsson slipped 0.1% in early Stockholm trade.

(END) Dow Jones Newswires"

Posted to the site on 5th June 2007