Sterling, Va.-based information tech firm Neustar (NSR) spent $450 million this week on its long-term readjustment of its business after losing its lucrative federal phone number switching contract earlier this year to Ericsson parent company Telcordia. The money, which is about how much the phone switching contract brought in every year, went into acquiring marketing analytics firm MarketShare Partners.
There has been plenty of speculation about what would happen to Neustar after the contract, which it held for 18 years, was given to Telcordia. Even ahead of the actual contract loss, Neustar's stock took a hit just from the FCC's recommendation of Telcordia. That did give executives at Neustar time to prepare however, and clearly the MarketShare deal has been in the works for a while.
The Los Angeles-based MarketShare brings along about $57 million in revenue from big-name clients like MasterCard and Twitter, and gives Neustar a bigger spot in the analytics industry, something it needs after losing the number switching contract, which caused a notable dip in its stock price. The analytics tech will combine with Neustar's own media and audience targeting and measuring technology, with the acquisition completing by 2016 assuming that regulators approve of it.
That will cap off a lot of other changes Neustar has made since the contract change began. In June, Neustar sold its electronic surveillance technology to Colorado-based Subsentio, a normal move for a company looking to readjust after a big change in revenue flow.
But Neustar hasn't only been just about slimming down. In fact, MarketShare is just the latest acquisition for Neustar. In September, the news came out that it spent almost $87 million to buy Bombora Technologies, an Australian company that will expand its domain registry services. That same month, it bought the technology for caller authenticating from Reston's Transaction Network Services for $200 million. All of which points to a company thinking big, albeit in a new direction. The stock has been slowly climbing since the rumors, and then confirmation of the new acquisition, suggesting Wall Street may be feeling a bit more optimistic about Neustar and its ambitions as well.
