TOKYO – Japan’s NEC Corporation (TSE: 6701) said on Wednesday it will acquire U.S.-based software company CSG Systems International, Inc. (NASDAQ: CSGS) for approximately $2.89 billion in cash, a move aimed at significantly expanding its footprint in the North American telecom technology market.
The deal, one of the largest overseas acquisitions by a Japanese tech firm this year, values CSG at $80.70 per share and is expected to be completed within the 2026 calendar year, pending regulatory and shareholder approvals.
The acquisition underscores NEC’s strategic pivot toward high-value-added software and services, particularly for telecommunications and broadband providers undergoing digital transformation. The transaction will be funded through a combination of cash on hand and external debt, with no plans for new equity issuance.
“NEC sees this as a pivotal step in strengthening our business foundation in the United States and expanding our software and services business globally,” said NEC President and CEO Takayuki Morita in a statement.
The key rationale behind the deal is the high complementarity between CSG and NEC’s existing U.S. subsidiary, Netcracker Technology Corporation. While Netcracker has a strong global presence with over 250 customers, CSG brings a deep-rooted, stable client base primarily among U.S. telecom and broadband operators.
CSG, headquartered in Englewood, Colorado, provides Business Support Systems (BSS), which handle customer management, billing, and charging. This directly complements Netcracker’s offerings, which include both BSS and Operation Support Systems (OSS). The combined entity will be better positioned to offer end-to-end solutions to a global clientele.
“The NEC Group will provide full support to both companies with its management resources, including its technologies, customer base, and capital,” Morita added.
The acquisition will be executed via a reverse triangular merger. A special purpose company established by NEC Corporation of America (NECAM) will merge with and into CSG, with CSG surviving as a wholly-owned subsidiary of NECAM.
CSG has demonstrated consistent financial growth. For the fiscal year ended December 31, 2024, the company reported consolidated net sales of $1.20 billion, with net income of $86.85 million. Its major shareholders include investment giants BlackRock Inc. and The Vanguard Group.
NEC stated that the impact of the transaction on its consolidated financial results is still under review and will be disclosed promptly if any material impact is identified.
The deal highlights the ongoing consolidation in the telecom software sector as providers seek comprehensive partners to help them navigate the integration of new technologies like generative AI and 5G.