Camiant Information Exposed (and Compared to Bridgewater)

Yesterday's announcement by Tekelec (NASDAQ:TKLC) (see "Tekelec buys Camiant" - here) and its quarterly earning call provides us with some information on Camiant, which was unavailable so far as Camiant was a private company.

During the call, Tekelec President and CEO, Frank Plastina (pictured at right), and CFO Gregory Rushsaid provided the following information on Camiant (full transcript, provided by Seeking Alpha, here):

• "Over 30 mobile and fixed service providers have selected Camiant for their policy needs. In fact, Verizon Wireless recently announced that the Camiant solutions will perform the policy function for their LTE and IMS deployments." (see "Verizon Wireless Selects Camiant for PCRF (so what happened to Bridgewater?)" - here)
   
• "Additional customers include Vodafone, Sprint, Comcast and Cox. Since it was founded, Camiant has booked over $60 million in orders .. They have deployed over 150 systems that support more than 185 million broadband subscribers ..Camiant estimates that today their solutions support 70% of all North American cable modem subscribers. Camiant's early policy deployments with Comcast became the de facto standard in the US cable space."
   
• Their work with Vodafone (see "DPI Deployments - Part3: Vodafone Hungary Case" - here - but it seems they work with additional Vodafone subsidiaries) and others is today defining policy in the 3G space and the Camiant policy solution win at Verizon Wireless will now shape the definition for LTE and IMS network deployments.
   
• "In terms of the integration [with Tekelec products] realistically, Brian, that's probably something that's going to happen in 2011 because the good news with the Camiant deal is that we're at the heart of the initial LTE deployments at Verizon Wireless. So we're not going to [swap] that."
   
• "You look at the policy space, we see reports anywhere from 20% to 25% growth in 2011 and beyond and a market size in 2011 of about $200 million to $300 million." [see "Policy Server Market - Still Small, but Always Optimistic! - here]
   
• "we're actually acquiring about $15 million of backlog from the two [Camiant and Blueslice] and we've got some deferred revenues that obviously we're going to have to flow through and not claim but there's a bunch of deferred revenue on their balance sheets as well."
   
• "But you can see [slide 17 - here] that the $20 million is what we see right now between obviously today and whenever we close the Camiant deal, which is shortly, and the rest of the year."

The last point, forecasting $20M revenues during the next 7 months for the 2 acquisitions, allows to estimate that Camiant revenues forecast for 2010 is around $26-28M and the price/sales ratio is therefore 4.6 to 5 (I assume Camiant has almost no cash today, revenues split between Camiant and Blueslice is 85/15 and there is growth in the next 7 months).

Let’s compare this to Camiant's main competitor - Bridgewater Systems (TSX:BWC) (see "Bridgewater - Strong Quarter - New Customers" - here):

• Revenues forecast for 2010 (was updated recently) is CAD$85-94M
• Cash (March 31st) at CAD$84.3
• Market cap ~223M (market close yesterday, assuming 25M shares). 
• Enterprise value - CAD$139M (looks familiar?)
• Price to 2010 revenues - 1.46 to 1.62 

Bottom line - Camiant was 3 times more expensive! Good job by Camiant management !