in an all-stock deal that will create a giant in wireless communications software.
The deal values LHS at around $4.7 billion. Under terms of the agreement, Sema will issue 2.6 ordinary shares for each share of LHS, a 76% premium over LHS' closing price Tuesday.
But that premium narrowed to about 34% before the market opened Wednesday. LHS soared in pre-market trading Wednesday after the deal was announced. The Atlanta-based telecommunications software maker recently traded around 51 3/4, up 15 1/8, or 38%, from Tuesday's closing level of 39 5/8, according to
After the deal, current Sema shareholders will own about 73% of the combined company, while LHS shareholders will own about 27%.
The combined company will be one of the largest players in developing software that supports mobile communications, and expects to capitalize on the explosive growth in that sector, the firms said.
Sema, a London-based computer software and consulting firm, expects the deal to add to its earnings immediately, and the combination is expected to create substantial revenue growth within the next two to three years, the companies said in a release.
"The combination will assist us in achieving our stated telecoms strategy of becoming the worldwide leader in customer care and billing, prepaid, messaging, value-added services and mobile commerce," said Peter Bonelli, chief executive officer at Sema in a statement.
Helmut Ladermacher, chairman and one of the founders of LHS, along with LHS board member George Schmitt will join the board of the combined company.