Amdocs’ acquisition of MX Telecom is interesting in a number of ways.

To take a brief step back, Amdocs has traditionally aimed to help operators align business processes around the end user by centralising the various information assets they have. This could be product, customer or network data. Initially the focus was on billing and CRM solutions but with acquisitions and in-house development, these offerings have grown such that Amdocs is pretty much the backbone of an operator’s service enablement. Now, they even enable operators to establish their customised portals for e-commerce or in current parlance – app stores. Furthermore, they also have solutions which enable advertising across multiple channels.

Before this turns into a marketing pitch for Amdocs, let’s take a look at their acquisition history: In 2006, they acquired QPass which provided software solutions for digital commerce. And then in 2010, they acquired jNetX, a service delivery platform. In the interim, they have acquired firms for various components of OSS/BSS billing solutions.

So where does MX Telecom come in?

First, MX Telecom provides voice and data messaging services – this is to telecom operators and ISPs at one end and content providers and data vendors at the other. The services include SMS, multimedia messaging, IVR, video short codes, location services and Internet and TV related solutions – all of these being a gap in the current Amdocs portfolio.

Second, they have a well established payment platform along with a micro payment facility. In fact recently MX Telecom launched a mobile-crediting solution for pre and post pay users which, I think, may actually prove very useful in the context of micro-payments for virtual goods in the mobile gaming sector (anyone thinking mobile Kwedit).

Interesting enough, these are both gaps in Amdocs’ arsenal. The company had OpenMarket in the US but as they have stated in their press release, MX Telecom will further buttress the OpenMarket offering internationally.

MX Telecom was founded in 2000 and has had a very sound growth path, being ranked first in the Deloitte Technology Fast 500 EMEA awards in 2006. The firm’s been acquired for $104 million net of debt and cash which translates to an estimated 1.2x 2008 revenues and 10-11x adjusted 2008 EBITDA (Source: Megabuyte Newswire). That’s quite a good deal for a sector trading at 1x revenues and 8.5x EBITDA. There should be more on the financials when the firm completes its fillings. Will keep you posted.