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Bridgewater Systems Corp. has caught the eye of everyone in the mobile space in the past few years, and the attention and client base finally gave enough reason for Amdocs to sweep in and scoop the company up for cheap.

That isn't to say the 30 per cent premium Amdocs paid to Thursday's closing price is low. It's just that one month ago Bridgewater was trading north of $8 a share, and Amdocs only offered up $8.20 per share. The company was able to get away with that because Bridgewater's share price plummeted after investors dumped the stock following disappointing first quarter earnings. (Plus, Bridgewater had shopped itself around a bit, and no one else made an offer.)

However, despite the recent low stock price, the company has a high growth profile and has already snagged some big name customers, such as Bell, Sprint an Verizon Wireless.

Although Amdocs operates in the same general space as Bridgewater, offering services like mobile billing solutions and "in-the-home" products that allow clients to manage home security and energy consumption, TD analyst Scott Penner was a little surprised it showed up as the buyer. "While Bridgewater and Amdocs do share some common customers (including Bell, Sprint, Telstra), we had always believed a large network equipment vendor would make a more strategic acquirer, some of which are current partners of Bridgewater and could drive considerable synergies."

Yet Bridgewater's board supports the deal, and 35 per cent of the company's shareholders have said they would vote in favour, including Crescendo Partners, which owns a 10 per cent stake. The deal offers a nice return for the activist shareholder, considering that it bought it in throughout 2008 and 2009 when the stock traded in the range of $2 to $4.

Bridgewater is an emerging player in the rapidly growing mobile market. The company offers products that allow service providers to manage data services and content, as well as track their subscribers in finite detail.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 6:55pm EDT.

SymbolName% changeLast
DOX-Q
Amdocs Ltd Ord
+0.04%89.9

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