Qvantel saves BSS peer Optiva with cut-price acquisition

• BSS vendor Optiva has been in a distressed state for some time
• Earlier this year it told its patient lenders an acquisition deal was on the cards
• Its saviour is Finnish BSS specialist Qvantel, which gains scale but also debt through the agreed takeover transaction
• Making the combination work will be tricky and messy

Canadian BSS vendor Optiva, which has been struggling financially for some time, has been saved from collapse by Finnish BSS firm Qvantel, which is acquiring its peer for a combination of cash and stock to gain greater scale. 

But the Qvantel team has its work cut out to make the deal a success. 

Optiva has been slowly shrinking over the past couple of years – it reported a near 10% year-on-year dip in second-quarter revenues to just US$10.3m, when it also posted a net loss of $4.4m – and reached a financial crunch point earlier this year when it found it couldn’t meet its debt obligations. However, in July it struck a deal with its lenders as a potential acquisition was in the works. 

Its white knight has turned out to be Qvantel, which will pay CAN$0.25 per share for Optiva’s stock (which values the total share equity at just CAN$1.6m). Following the announcement of the deal on Friday 26 September, Optiva’s share price on the Toronto stock exchange crashed by almost 60% to CAN$0.26. 

The almost US$114m in debt and accrued interest that Optiva owed its lenders will be cancelled. In its place, those debtholders will be issued Qvantel shares that represent 22.4% of the Finnish firm’s total share count once the takeover deal is completed (so it’s a partial debt-for-equity swap) as well as warrants that allow them to buy an additional 3% of Qvantel’s stock.   

In addition, Qvantel is issuing new debt valued at US$25m to Optiva’s lenders. 

It’s hard to know what this all adds up to and it’s very likely that Optiva’s debtholders are taking a loss, but it’s better than picking up pennies in the pound from a liquidation process and they now have a stake in a bigger and stronger company. The acquisition is expected to be completed before the end of 2025.

According to Qvantel – which has developed a portfolio of cloud-native BSS applications (billing, CRM, order management, product catalogue etc) and which counts various operations with the Veon Group (Kyivstar, Banglalink) and Spanish telco MásOrange among its customers – the acquisition will create a company that can “provide CSPs with an agile and trusted alternative to legacy vendors”. 

The combination with Optiva will give it an “extended portfolio of AI-enabled products with full-stack BSS, real-time revenue management and charging” as well as a “combined customer base of over 70 CSPs in more than 40 countries” and a workforce of more than 1,000 staff across more than 30 countries.

“For customers, partners and employees, this marks the opening of the exciting journey to drive innovation, business success and inspiration. This builds on our strong momentum in the BSS market,” stated Qvantel chairman and CEO Matti Roto. 

“With a unified global team, extended scale and close collaboration with leading CSPs, the combination of Qvantel and Optiva is set to lead the next evolution of BSS and monetisation in the AI era. Together with Optiva, as a proud multicultural company, we cherish our shared Nordic and Canadian roots, united in a common corporate culture built on trust, commitment, collaboration and care. This will ensure a seamless integration that enhances the services we deliver,” added Roto.  

That’s the kind of bullish talk you’d expect from the head of a company that is making a strategic acquisition, of course. But acquisitions are costly (in terms of money, management focus and resources) and, as with anything that involves people, messy and Roto will need to make it crystal clear, especially to Qvantel’s workforce, partners and the expanded customer base, exactly what the combined company’s plan is in terms of the product portfolio, its further development and its strategic direction. 

The deal certainly brings customers (including BT Group, América Móvil and Vodafone Idea), experienced staff and revenues on board – Optiva’s current annual revenue run rate is about US$41m to add to Qvantel’s annual revenues, which are not published but are estimated by Omdia analyst (practice leader) James Crawshaw to be about US$70m.  

But it gives Roto and his team a new set of challenges. As Omdia’s Crawshaw notes in this LinkedIn post about the deal, while the acquisition “should provide great relief to Optiva’s customers, who must have had concerns about the viability of the company for several years, there will be a lot of overlap with Qvantel’s existing BSS portfolio. Sorting out a product roadmap and achieving cost synergies will be a pressing challenge for Qvantel.” (Crawshaw also amusingly suggests the name of the merged company might become Qvantiva – nice one, James!)

And Justin van der Lande, research director at Analysys Mason, noted in this LinkedIn post that “financially, this was needed by both companies who have been struggling to retain their market shares.” 

Challenging the telecom software sector giants, such as Amdocs, Ericsson, Huawei, Netcracker and Nokia, is always going to be tough for smaller vendors, but there continues to be room for competitive, alternative suppliers in the BSS sector, as the likes of Cerillion and Tecnotree have shown. That said, Roto and his team are facing a major challenge in 2026 to make this combination work.  

- Ray Le Maistre, Editorial Director, TelecomTV