CAIRO: Intel Corporation, through its business entity Intel Mobile Communications, acquired most of the assets of SySDSoft, a privately-held software company based in Cairo.
“We would like to emphasize Intel’s commitment to Egypt, especially in these hard times,” Taha Khalifa, Intel Egypt’s country manager, said in a press conference.
Intel, global chipmaker and digital technology developer, hired 120 of SySDSoft’s electrical engineers and computer scientist, the firm said. SySDSoft designs IP software solutions and provides wireless and communication technology.
According to its website, SySDSoft specializes in embedded wireless system design and development, and its product portfolio includes WiMAX, Wi-Fi, Bluetooth, wireless USB, Zigbee/Wireless Sensor Network, and LTE (long-term evolution).
Khaled Ismail, CEO of SySDSoft, said, “The company started out as one, then two and then grew to a staff of 120 in eight years.”
In a note, Cairo-based investment bank Beltone Financial said that the acquisition “signals continued foreign investor confidence in Egypt’s economic fundamentals and longer-term view of an improved Egypt both on the political and economic fronts.”
Ismail, who has helped the firm grow, said he views the company as one of his children and the time has come for it to move on, referring to the acquisition. “I realized I could either keep the company the way it is and not have it acquired and risk losing everything or I could get acquired and that seemed like the smarter choice which led to the deal with Intel,” said Ismail.
Negotiations started last year in 2010 and have just now been finalized. Khalifa said Intel now has hopes to put out a smart phone by the end of this year and the acquisition will help in achieving that goal.
“Intel is making the necessary investments to further enhance its existing…wireless product portfolio and to offer reliable platforms…that will work seamlessly across a range of global networks,” said Herman Eul, president of Intel Mobile Communications, in a statement.
“The acquisition supports this strategy and we believe that SySDSoft’s proven and experienced engineering team, combined with Intel Mobile Communications’ existing wireless strength, positions us well for continued growth in LTE,” he added.
LTE is described as a “high performance air interface” for mobile communication systems — the last step toward 4G radio technologies set to increase the capacity and speed of mobile telephone networks.
Ismail described the deal in financial terms as “big” without specifying its value, saying that money was not the deciding factor for the deal.
The firm reportedly received offers from a few other companies that were willing to pay more, but that their close personal relationship with Intel, and its acquired company Infinium, helped with the decision.
Christian Mucke, vice president of Intel Mobile Communications, said, “This deal is the largest acquisition in the North Africa and Middle East region for Intel.”
Mucke also told Daily News Egypt that the company looked at various other companies but SySDSoft was the better choice. “The team will work on multi-communication solutions and work closely with our two teams in Germany,” Mucke added.
“The acquisition of engineering and design talent from an Egypt-based company in the field of cutting-edge wireless and communication technology is the first of its kind for Intel in the Middle East,” said Arvind Sodhani, president of Intel Capital and executive vice president of Intel, said in a statement.
One audience member, who said he has worked closely with Ismail and SySDSoft in the past, commented that SySDSoft is a prime example of entrepreneurship in Egypt and the length it can go.
“This acquisition will definitely open doors for investments into Egypt and small and medium enterprises in the country and shows what the people can do,” said Taha Khalifa, Intel Egypt’s country manager.
“We never had any intention to pull out of this deal, even in spite of the recent events that occurred,” said Khalifa.
Mucke attributed SySDSoft’s performance and reputation as key qualities in the company that led Intel to choose them as well as their time zone placement making it easier to communicate between teams in Egypt and Germany.
“There is a growing market in this particular sector right now and while we don’t have any set plans to expand right now, after future performance is analyzed, we will add more employees down the line,” he added.
While Beltone said a number of small M&A transactions are being restarted, without specifying, it added that FDI inflows to Egypt are expected to decrease in fiscal year 2010/11.
“We expect Egypt’s political events to spur a contraction of 40 percent in the second half of fiscal year 2010/11, leading to our estimate of $4.5 billion in total FDI inflows, down from $6.8 billion” the previous year, Beltone said.
FDI should rebound the following year, however, as the “political situation clarifies and security prevails in Egypt, where the positive medium and long term view of Egypt’s strong economic fundamentals married to a democratized state holds greater potential for FDI in Egypt.” –Additional reporting by Amira Salah-Ahmed
