Bridgewater sale to Amdocs a minor success for billionaire Terry Matthews

As last year’s Ryder Cup, which was plagued by torrential downpours and had to be finished on a Monday for the first time in its eight year history, Terry Matthews proved his perseverance can produce success against even the most difficult of conditions.

Matthews, the Ottawa tech legend who was the first billionaire in the history of Wales and built sprawling Celtic Manor specifically to host the biennial golf tournament, has had many big wins in his business life. In the mid-eighties, Matthews cashed in when his Mitel sold to British Telecom. He then sold Newbridge Networks, a company named after his hometown, to Alcatel for more than $7 billion.

While last weeks sale of Ottawa’s Bridgewater Systems (TSX:BWC), of which Matthews is Chairman, to Amdocs (NYSE:DOX) was a disappointment to some analysts, including the National Bank’s Kris Thompson who said the deal is happening “…at the worst possible time,” because it was made “…right after a material revenue guidance reduction.” The bigger picture says the move has to be counted as a least a minor success, as Bridgewater went public in 2007 at $5.50 a share.

The definitive agreement, which was announced on Friday, values Bridgewater at $211 million, or $8.20 a share, a thirty per cent premium to Thursday’s closing share price of $6.33. Shareholders who represent more than 35% of the company’s shares, including Matthews, have come out in support of the deal. Shares of Bridgewater had risen as high as $11.34 in March of 2010, but had recently slumped to barely $6.

Bridgewater makes policy management software that allows carriers to have much greater visibility and flexibility around billing functions. Some believe this type of software will be in high demand as billing as operators move away from unlimited data plans.

According to Matthews the “…transaction is in the best interest of our shareholders and has the full support of the Board of Directors, senior management and key shareholders. Furthermore, joining a large, international market leader in Amdocs would create new growth opportunities for Bridgewater.”

The Globe and Mail’s Tim Kiladze, however, may have echoed the sentiments of some shareholders when he described the acquisition Friday as “A sweet deal for Amdocs” because they snag a company that has won some big name customers, including Verizon Wireless, Bell and Sprint.

Missouri based Amdocs Limited (NYSE: DOX) is in the customer relationship management (CRM) business. The company is an offshoot of Golden Pages, the Israeli business phone directory company. The company branched out into the financial services industry in the early 2000’s. In fiscal 2010 Amdocs recorded nearly $3 billion in revenue. It’s customers include T-Mobile, Vodafone, Bell Canada, Telus, Rogers Communications.

Matthews, meanwhile, remains on the board of two other Canadian listed telecom plays, Ottawa’s DragonWave (TSX:DWI) and Vancouver’s Counterpath (TSXV:CCV).

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