EBITDA to improve post activation biz sale: Subex

Subex Ltd, a provider of telecom software products, has entered into an agreement to sell its activation business to NetCracker.

In an interview to CNBC-TV18, Subash Menon, chief executive officer and managing director of Subex said, almost 20% revenue, in the last financial year, came from this business. However, he said, EBITDA will improve post this deal.

Overall, he said, he expects 20% revenue growth in FY12.

Also read: Subex signs deal to sell biz to NetCracker

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Reema Tendulkar. Also watch the accompanying video.

Q: Can you give us some details on the deal of selling the activation business? What is the kind of money you are making?

A: At this point in time, that is not public information. Both the parties involved, we and NetCracker, which is part of the NEC group, has decided not to share that information right now.

Our activation business, which we acquired from Syndesis in 2007, has been sold now. This transaction is expected to close by the end of this month, hopefully by September, 29 or 30.

Q: What was the share of your revenues that was coming from this business that is now moving out?

A: Almost 20%, in the last financial year, came from this business. But what is more pertinent is whether this was profitable or not. Actually what has been happening over these past few years is that this particular business, which we acquired from Syndesis, has been incurring losses in most of the financial year in the past few years. In the last financial year, it was just about breakeven.

Sale of this business will have a significant impact on the bottomline of the products business. So, if you were to look at the products business, EBITDA last year was 33%. If this business was not there, at that point in time for the whole of that year, EBITDA would have been like over 39%. So that