PAETECs Billing-Platform Buy Will Benefit Agents

PAETEC Software Corp., a division of the $2 billion CLEC, has agreed to buy the U.S. assets of its own billing provider, Formula Telecom Solutions Ltd. (FTS)

And, PAETEC says, agents will benefit from the acquisition.

PAETEC plans to snap up the Leap RevChain technology and brand from Israel-based FTS for $13 million in cash. The deal should close in just a couple of weeks; PAETEC will keep the 40 employees who run RevChain out of Boca Raton, Fla.

The deal initially might seem an odd one for PAETEC, but consider the rationale. First, PAETEC has used RevChains billing platform for more than 12 years. FTS remains a small company that has seen some rough financial times. Buying RevChain ensures that PAETEC and the other dozen or so CLECs that rely on RevChain will be able to keep using the system without hiccups.

Its not about us just taking over the assets so we can do with them as we will its really about taking a key asset in our industry and protecting it,” said Robert Moore, CIO and executive vice president of PAETEC.

Second, the deal adds to PAETECs holdings, which extend beyond communications products, into the software and energy realms. RevChain will become the heart of PAETEC Software, and target businesses, institutions and other carriers.

To be sure, PAETEC intends to ratchet up RevChains adoption rates, and largely through its agent channel. The company hasnt said what kind of year-over-year growth rates it would like to see, but RevChains current revenue stands at $7 million a number PAETEC undoubtedly wants to improve. Agents will be key to that growth.

One-third of our distribution is through the channel and a lot of those agents are very large and on the wholesale side,” Moore explained. So the relationships with other carriers and resellers/agents is a good opportunity not only for RevChain but for future products on RevChain like helping resellers do managed services.”

Agents also could use RevChain in their own operations.

RevChain is absolutely one of the best platforms out there,” said Moore.

Indeed, PAETEC aims to make the most of RevChains strengths such as high-performance transaction processing, invoice, and flexible rating and billing. The company even aspires to push RevChain to the sme recognition and adoption level as rivals Amdocs and Intec.

This is a flexible, great, scalable platform,” Moore said. People should see that were serious about maintaining and growing innovation.”

FTS started in 1991 as Daleen Technologies. It later became Viziqor Solutions. In December 2005, FTS bought Viziqor and renamed it to FTS.

PAETEC was always a great customer of FTS Inc.,” Amos Sivan, FTS CEO, said in a press release. They have clearly seen the potential in the Leap RevChain solutions and were delighted that they will be building on the great work we have done.”