About

Tekelec was a leading global provider of network signaling, policy control, and subscriber data management solutions for communications networks. Tekelec sells integrated software and hardware that connects different components of telecom networks and enables communicates between different applications. For example, provisioning a voice call on a wireless network requires signaling to the billing module to deduct minutes from the customer’s account. The company has a large and stable install base inside 3G and cable networks. More recently, Tekelec developed Diameter, the connecting glue inside 4G LTE wireless networks and winning many of the early adopters of LTE technology.

Insight & Approach

Vector Capital conducted due diligence on Tekelec during the sale process of the company, and was in pole position to provide financing to the winning buyer. Tekelec had long-standing customer relationships with all of the major telecom carriers. Tekelec’s products are deeply embedded inside the telecom networks and customers face large switching costs to move to an alternative. Tekelec also developed leading technology to enable communication on 4G LTE networks, enabling it to benefit from the global roll out of LTE.

Vector Capital invested in a private transaction with tight covenants and attractive call protection. Vector's investment enabled the company to continue to invest in marketing its LTE technology.