Boston Communications Group Inc. of Bedford, a major US provider of prepaid wireless services, yesterday said it has agreed to be purchased by an Indian company for $65 million.
As part of the all-cash deal, Megasoft Ltd., of Hyderabad, India, will establish a subsidiary called Tea Party Acquisition Corp. to manage Boston Communications, known as BCGI, and lead a Megasoft push into telecommunications throughout North America and Latin America.
"We are doing business all over the world, but we aren't doing much in North America," said Michael Powell , executive vice president of global alliances for Megasoft in Hyderabad. "So the opportunity was to move to the next phase of our growth strategy, and that was the impetus for the acquisition of BCGI. This makes a lot of sense for us."
BCGI has endured several setbacks in recent years, starting with the loss of a big patent lawsuit in 2005.
Last fall, it replaced two top officials, chief executive E.Y. Snowden and chief financial officer Karen Walker , and said it would restate financial filings after finding flawed accounting on stock options.
In April, the company said it planned to idle 93 employees, reducing its global workforce by 21 percent, after losing some important business.
Despite these problems, BCGI "has delivered very good high-quality services to its customers," mostly wireless operators that hire it to run their payment systems, Powell said yesterday.
Megasoft is offering $3.60 each for BCGI shares, more than double their average of the past 30 days. BCGI's stock vaulted 70.85 percent to $3.40 a share on the Nasdaq exchange yesterday in response to the takeover bid, a gain of $1.41 a share for the day.
Joseph Mullaney , the current BCGI chief financial officer and acting chief executive, said the deal was good for share owners, employees, and customers. Megasoft plans to retain Mullaney's senior management team and its 375 employees worldwide, including 220 in Bedford. "We see benefits," Mullaney said. "They'll use our platform to expand in the US, and they'll help us to expand in other markets."
Acquisitions of Massachusetts technology companies by Indian buyers remain relatively rare, though there have been small deals in the outsourcing and technology services fields in recent years.
"India is becoming an important player," said Chris Anderson , president of the Massachusetts High-Tech Council in Waltham. "For any company to succeed in a global market, they're going to have to acquire strategic assets in places like Massachusetts."
Robert Weisman can be reached at firstname.lastname@example.org.