Bangalore, India-based Subex Systems Limited has agreed to acquire London-based Azure Solutions for approximately $140 million in a mostly stock deal that the companies are billing as a merger of equals in the fraud management and revenue assurance space.

The two companies have been consolidating their space over the last few years. Subex most recently acquired the fraud management assets and technology of Mantas in March of this year, Lightbridge in August 2004 and Alcatel in July 2004. Azure acquired U.S.-based cost and revenue-assurance company Connexn Technologies and U.K.-based software company Anite Calculus in November 2004.

"Both companies have a pretty good history of growing both organically and through acquisition. There is nothing on the horizon that I know of, but the mindset is that Subex Azure will continue to look at appropriate acquisition opportunities," said Steven Bruny, president of Azure Solutions.

Together the new company, named Subex Azure Systems Limited, claims it has the top spot in the fraud management and revenue assurance market, and will be second in interconnect and inter-party billing behind Intec.

Subash Menon, the current chairman and CEO of Subex Systems, will lead the new company. John Cronin, president and CEO of Azure Solutions, will stay in through the integration of the companies. Subex was founded in 1992 and went public in 1999. It is in India on the Mumbai, Bangalore and National Stock Exchange and its GDRs are listed on the Luxembourg Stock Exchange.

Although the deal is an acquisition, Bruny said from a revenue standpoint and from the point of view of the market, it was a merger of equals. "The direct benefit to customers is that Azure and Subex have both made it their mission to be the market leader in fraud and revenue assurance, so customers see this as a commitment to that leadership space and they now see that the company is truly a global concern," he said.

Azure was spun out of BT in April 2003 and has become one of the leading revenue-assurance companies. It has 200 employees and has made strong headway into the U.S. market in the last two years.

"Last quarter we won seven significant deals and we think we have three more we will win in the next month or two, so we have had a big uplift in our deal flow," Bruny said.

The combined company will serve 23 of the world's 40 largest operators and will support more than 150 customer installations in over 60 countries, including BT, Telenor, Cable & Wireless, Vodafone, Orange, O2, TeliaSonera, Rogers Wireless, T-Mobile USA, Verizon, Bharti Televentures and AT&T.

Bruny said the deal will help both companies compete in three ways. The first is reference customers, which he said allows prospective customers to talk to existing customers who have seen how successful its implementations have been. The second is the talent pool.

"Revenue assurance is not just technology; it is the practice of revenue assurance and maximization. And between the two companies we have a lot of trained and experienced people," Bruny said.

Lastly, the new global customer base positions the company differently from the rest of the market. "We really do have the resources and delivery teams across the main three geographic regions," Bruny said.