Amdocs enters partnership for the purchase of the land for its future campus in Israel
Dec 6, 2017
Company looks to future campus as an opportunity to shape company culture and improve the experience for its employees, while benefiting diluted earnings per share over the long term
ST. LOUIS – Dec. 6, 2017 – Amdocs (NASDAQ: DOX), a leading provider of software and services to communications and media companies, today announced it has signed an agreement with Union Group to partner for the purchase of the land1 for its future campus in Ra’anana, Israel. The transaction for the acquisition of the land is expected to be completed in the near term upon satisfaction of customary closing conditions.
Union Group, privately-held, is active in various business domains, with vast experience in developing and operating real-estate properties in Israel and abroad. The partnership will be able to benefit from Union Group’s strong expertise in developing real-estate assets.
Amdocs looks to its future campus as an opportunity to shape company culture and improve the experience and productivity of its employees. The new campus will provide an advanced, optimal working environment that can fully meet the needs of Amdocs Israel and its employees, and support the company’s future growth.
The total net investment that Amdocs expects to make in connection with the purchase of the land and the construction of the new campus is expected to reach up to $350 million over a period of four to five years, and is expected to be financed by internal cash resources. As previously disclosed, this investment includes incremental capital expenditure of up to $100 million in fiscal year 2018. Excluding this incremental capital expenditure, Amdocs expects to generate free cash flow of roughly $500 million in fiscal year 2018, of which it plans to return approximately 100% to shareholders through its ongoing share repurchases and dividend program for the full year. Beyond fiscal 2018, as a general long-term guideline consistent with our prior messages, Amdocs expects to return a majority of free cash flow to shareholders after adjusting for the investment in the campus, subject to factors such as the outlook for M&A, financial markets and prevailing industry conditions. Amdocs believes its decision to build a new campus will be accretive to diluted earnings per share over the long term.
1 Amdocs press release, 13 Sept 2017: Amdocs Signs an Agreement to Purchase Prime Real-Estate in Ra’anana for its Future Campus