CSG International

CSG Systems International, Inc.
Public company
Traded as NASDAQ: CSGS
Founded 1994 (1994), Omaha, Nebraska, U.S.
Founder Neal Hansen and George Haddix
Headquarters Englewood, Colorado, U.S.
Area served
 Worldwide
Key people
 Bret Griess (CEO)
Products Business support system (BSS)
Customer interaction management
Revenue $752.5 million (2015)[1]
$149.6 million (2015)[1]
$62.567 million (2015)[1]
Total assets $877.233 million (2015)
Total equity $345,845 million (2015)
Number of employees
 3,277 (2015)
Website www.csgi.com

CSG International (CSGI) is a multinational corporation headquartered in Englewood, Colorado. It provides Business Support Systems (BSS) software and services, primarily to the telecommunications industry.

CSG was founded by Neal Hansen as a division of First Data in 1982. It became an independent corporation when it was acquired by CSG Holdings in 1994 for $137 million. A contract with Tele-Communications Inc. (TCI), the largest cable TV business at the time, was influential in the company's growth from $80 million in revenue in 1994 to $171 million by 1997. CSG went public in 1996. A dispute with TCI over pricing led to a $120 million arbitration settlement in 2002 with Comcast, who acquired the TCI business. The two continued to do business together and expanded their relationship in 2014. CSG made more than ten acquisitions in the 2000s, mostly of companies that sold billing, customer service and operations software.

Corporate history

Early history

CSG International was founded in 1982 by Neal Hansen under the name Cable Services Group (CSG) as a division of the payment processing company First Data Corporation.[2] At the time First Data was operated by American Express, which acquired a controlling interest in the company in 1980.[3] CSG became a part of the American Express Information Services Company, which was formed in 1989.[4] The CSG group's first large-scale billing statement processing center, which prints and mails bills to consumers, was established in Omaha in 1990.[5]

Hansen left the Cable Services Group one year after it was founded to become CEO of Applied Communications, where he met George Haddix.[2][6] Hansen and Haddix formed CSG Holdings with Morgan Stanley and Trident Investment Group in 1994, which acquired Cable Services Group that year for $137 million.[2][7] In November 1994, Cable Services Group was renamed to CSG Systems International.[6]

CSG was the second largest billing services provider for the US cable television industry by 1994,[8][9] serving 27 percent of cable TV subscribers.[7] However, according to The International Directory of Company Histories, its profit margins were small and the company was "still in need of a turnaround."[6] Broadcasting & Cable said CSG had lost direction and become complacent. Haddix and Hansen implemented changes at the company,[2] which prompted 350 out of 500 employees to leave the firm within a few months.[6]

The new CSG International grew quickly.[5][10] The convergence of phone, internet, on-demand movies, and other services created more complex billing arrangements between telecommunications companies and consumers, which led to more extensive use of billing services providers like CSG.[10] Professional services and international clients, which were previously not a significant portion of revenues, grew to 22 percent of revenues by the mid-1990s.[5][6]

Post IPO

In order to pay off debt and raise funding for acquisitions, CSG held an initial public offering in February 1996, which valued the firm at five-fold its original acquisition price.[6][11] CSG grew from $80 million in annual revenues when it was acquired, to $132.3 million when it went public in 1996 and $171.7 million by 1997.[5]

In the 1990s, Tele-Communications Inc. (TCI) and Time Warner scrapped efforts to create internal billing software and hired CSG International.[10] The 15-year agreement CSG signed with TCI on August 11, 1997[12] made CSG the largest vendor in the industry[5] and was the primary contributor to its growth in the '90s.[12] By 2001, the deal was responsible for 45 percent of CSG's revenue.[13] As part of the deal, CSG also acquired TCI's internally developed software, SummiTrack, for $106 million.[10][12] CSG's services to TCI included billing, customer management and payment processing for TCI customers.[14] In October 1997, CSG International signed its first deal with a utilities company, mc2.[10]

At the end of 1997, CSG co-founder George Haddix retired, and former EVP Jack Pogge was appointed President and Chief Operating Officer in his place.[15] In 1999 CSG began constructing a new bill processing center in Florida in a deal with local government, which expanded roads and provided other incentives.[16] In 2002, CSG acquired the billing software interests of Lucent Technologies for $260 million.[17][18] The deal was estimated to increase CSG's revenues by 38 percent and its headcount by 65 percent.[19] 200 Lucent employees were laid off as a result of the acquisition.[17] An additional 100 - 150 CSG employees were laid off later that year in response to poor economic conditions.[20]

Recent history

AT&T acquired TCI in 2000, inheriting its agreement with CSG.[13] AT&T alleged CSG was not abiding by the contract's terms to provide favorable rates. A legal dispute between the two companies began in 2001 in arbitration court. Before the dispute was resolved, AT&T Broadband was acquired by Comcast, who wanted to use its own billing and customer service vendor. In October 2002, a judge ruled that CSG owed Comcast a $120 million refund and that it had to reduce its prices.[21][22][23] The two companies disagreed over whether the ruling would allow Comcast to halt their agreement before the end of its term.[24] CSG and Comcast reached new agreements or extensions in March 2004[25] and in 2008.[26] In 2014 its work with Comcast was expanded to cover all of its customer support and billing for residential services.[27]

In March 2005, co-founder Neal Hansen retired at the age of 64. Ed Nafus, prior president of the broadband services division, took his place.[28] Nafus was replaced as CEO by Peter Kalan, at the end of 2007.[29] In November 2015, it was announced that Bret Griess would be succeeding Kalan as president and CEO.[30]

As of 2016, CSG International now has 33 offices in 22 countries across the world. This does not include minor 'satalite offices'.

Acquisitions

Date Company Business Deal size References
1980 CSG parent company First Data acquired by American Express Payments processing [3]
1994 Cable Services Group acquired by CSG Holdings Bill processing for cable TV operators $137 million [2][7]
1996 Bytel Limited Customer management software $4.7 million [5][31]
1997 TCI's SummiTrack Billing software $106 million [12]
1998 US Telecom Advanced Technology Systems Billing and customer service $6 million [6][32]
2001 Athene Software Customer analytics software Not disclosed [33]
2001 PlaNet Consulting e-commerce consulting Not disclosed [34]
2002 Kenan Systems assets from Lucent Technologies Billing and customer service software $260 million [17][18]
2002 Integrated Customer Management Systems (ICMS), an IBM division Customer service software $15 million (estimated) [35]
2005 CSG Global Software & Services division (formerly Kenan) acquired by Comverse Technology Billing and customer service software $251 million [36][37]
2006 Telution Operations software $22 million [38]
2007 Prairie Voice Services Interactive messaging services $39 million [39]
2007 ComTec Bill processing $23.5 million [40]
2008 DataProse Direct mail and bill processing $39 million [41]
2009 Quaero (later divested in December 2013) Marketing services firm $15 million [42][43]
2010 Intec Telecom Billing software $392 million [44]
2012 Ascade Wholesale billing software $19 million [45]
2013 Volubill (certain assets) Policy and billing management software Not disclosed [46]

Products, software and services

CSG International provides software and services for managing customer data, analyzing that data, billing and customer service. For example, customer service representatives may use CSG systems to lookup a consumer's records and add a new service, or business analysts may mine customer data for trends.[10] According to the company's website, its primary product areas are revenue management, content management & monetization, and customer interaction management.[47] CSG also prints and mails billing statements to consumers and provides call-center services.[2]

Product history

CSG International originally sold two versions of its billing process outsourcing services. Under new leadership in 1994, it began developing additional software and providing consulting to in-house billing departments.[6][9] During this period it developed CSG Workforce Express, a suite of software products that manage the dispatch of technicians and other logistics at customer sites. Workforce Express consists of three applications: CSG Workforce Management, CSG TechNet and CSG TechNet CE, which integrate with CSG's databases and billing systems.[6][48] It also developed CSG Care Express, which is for creating online self-service portals for consumers to view and pay their bills online.[6][49]

In the 1990s CSG introduced the ACSR (Advanced Customer Service Representative) system.[6] An extension to ACSR called ProfitNow! was introduced in 2003. ProfitNow! used a consumer's account data to advise customer service representatives on the likelihood of a caller cancelling their service or buying a new product.[50] It was later turned into an online system with a user interface similar to Microsoft Windows at CSG.net.[6] CSG purchased the Kenan FX software from Lucent Technologies in 2002. Kenan software managed billing and ordering and provided middle-ware to help various customer service and billing products integrate with each other.[51] CSG NextGen was introduced for international markets, with support for multiple languages.[6] In March 2014, CSG added a cybersecurity suite to its product portfolio, under the name CSG Invotas.[52] The company released CSG Ascendon, a digital platform for communications service providers, in March 2015. The platform uses content monetization and delivery systems without making excessive changes to existing infrastructure.[53] In November 2015 the Invotas unit was spun off into a separate entity.[54] Invotas was acquired by FireEye in a transaction that closed February 1, 2016.[55]

Organization

CSG International has three subsidiaries: CSG Systems, CSG Systems Software and CSG Services.[6] Its subsidiaries offer products and services, while the parent company, CSG Systems International Inc. is listed on the NASDAQ stock exchange.[34] As of 2015, its largest clients were Comcast, DISH and Time Warner, representing 24, 14 and 12 percent of its revenues respectively. CSG spends approximately 14 percent of its revenues on research and development. Its revenues are about 77 percent from payment processing and related services, 12 percent from software and the remainder for ongoing technical support. 85 percent of revenues are from the Americas.[56][10][57]

References

  1. 1 2 3 "CSG Systems International, Inc. Disclosures for Non-GAAP Financial Measures" (PDF). CSG Systems International, Inc. February 3, 2016. Retrieved June 7, 2016.
  2. 1 2 3 4 5 6 Colman, Price (December 8, 1997). "Making billing the bottom line: CSG has propelled itself to the top of an unsexy yet profitable business". Broadcasting & Cable. Retrieved August 20, 2014.
  3. 1 2 Janofsky, Michael (March 6, 1993). "American Express to Sell Bulk of First Data Stake". The New York Times. Retrieved August 20, 2014.
  4. ↑ "American Express Information Services Company Created". Information Today. June 1, 1989. Retrieved August 20, 2014.
  5. 1 2 3 4 5 6 Norris, Melinda (February 8, 1998). "Billing Keeps CSG Growing, Growing... But the firm has delayed the roll-out of its new combination-billing software, CSG Phoenix CSG Systems International". Omaha World Herald.
  6. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Pederson, Jay (February 2006). International Directory of Company Histories. St. James Press. ISBN 978-1-55862-579-2.
  7. 1 2 3 "Cable Services Group Unit Being Sold to New Company". The Wall Street Journal. October 28, 1994.
  8. ↑ "First Data to sell cable services unit to CSG". October 28, 1994. Retrieved August 20, 2014.
  9. 1 2 Higgins, John (November 21, 1994). "New CSG owners see company offering broader services". Multichannel News. Retrieved August 20, 2014.
  10. 1 2 3 4 5 6 7 Greim, Lisa (October 6, 1997). "Software Developer CSG is Soaring Firm Handles Customers for Cable TV Giant". Rocky Mountain News. Retrieved August 20, 2014.
  11. ↑ Higgins, John (March 4, 1996). "CSG Systems soars after stock sale". Multichannel News. Retrieved August 20, 2014.
  12. 1 2 3 4 "Tele-Communications in asset sale to CSG Systems". The New York Times. August 12, 1997. Retrieved August 20, 2014.
  13. 1 2 Gonzalez, Erika (July 7, 2001). "Companies likely to weather economy: CSG Systems International". Rocky Mountain News. Retrieved August 20, 2014.
  14. ↑ Greim, Lisa (August 12, 1997). "CSG Systems, TCI Seal Deal Worth $1.8 billion Denver Firm to Handle Bills, Customer Service". Rocky Mountain News.
  15. ↑ "Denver-Based CSG Systems International Names Pogge President". Omaha World-Herald. September 30, 1997. Retrieved August 20, 2014.
  16. ↑ St. John, Paige (September 18, 1998). "Florida to Help Fund Road Work at New Wakulla County Industrial Center". Knight Ridder.
  17. 1 2 3 Caulk, Steve (March 1, 2002). "CSG Grows as Workers Lose Jobs 200 Laid Off in Lucent Billing Division Deal". Rocky Mountain News. Retrieved August 22, 2014.
  18. 1 2 "Lucent Is Selling Software Unit To CSG Systems for $300 Million". The New York Times. December 24, 2001. Retrieved August 20, 2014.
  19. ↑ Caulk, Steve (December 24, 2001). "CSG Buys Lucent's Billing Division $300 Million Cash Deal to Add Staff". Rocky Mountain News. Retrieved August 20, 2014.
  20. ↑ "CSG Systems International Lowers Financial Projections, Announces Job Cuts". The Denver Post. July 30, 2002. Retrieved August 22, 2014.
  21. ↑ Milstead, David (October 29, 2002). "CSG Profit Down 80% After Fight with AT&T Cable, Restructuring". Rocky Mountain News. Retrieved August 20, 2014.
  22. ↑ "Cable Biller is told to pay $120 million to Comcast". The New York Times. October 9, 2003. Retrieved August 20, 2014.
  23. ↑ Walsh, Chris (October 9, 2003). "Ruling a hit to CSG firm must make price concessions, pay $120 million". Rocky Mountain News. Retrieved August 22, 2014.
  24. ↑ Walsh, Chris (October 13, 2003). "Lingering Unknowns Fate of CSG, Comcast Contract Uncertain Despite Judge's Ruling". Rocky Mountain News. Retrieved August 22, 2014.
  25. ↑ Walsh, Chris (March 18, 2004). "CSG Signs Revised Deal with Comcast Companies Agree to End Disagreement Dating Back to 2002". Rocky Mountain News. Retrieved August 22, 2014.
  26. ↑ Farrell, Mike (July 28, 2008). "CSG Rides the Comcast Wave". Multichannel News. Retrieved August 22, 2014.
  27. ↑ Reedy, Sarah (July 31, 2014). "Comcast Strengthens Billing Bond with CSG". Light Reading.
  28. ↑ Fillion, Roger (March 8, 2005). "CSG Picks Broadband Chief for CEO Nafus Will Replace Retiring Co-Founder Neal Hansen, 64". Rocky Mountain News. Retrieved August 22, 2014.
  29. ↑ "CSG CEO Ed Nafus to Retire; EVP Peter Kalan Named Successor". Wireless News. November 27, 2007. Retrieved August 22, 2014.
  30. ↑ Ben Miller (November 23, 2015). "CSG International CEO Kalan stepping down, Griess named successor". Denver Business Journal. Retrieved August 8, 2016.
  31. ↑ "Business News Briefing". Rocky Mountain News. July 2, 1996. Retrieved August 20, 2014.
  32. ↑ Sullivan, Dan (August 5, 1998). "CSG Makes Acquisition". Omaha World Herald.
  33. ↑ Branaugh, Matt (September 15, 2001). "Firm Buys Boulder, Colo.-Based Software Company". Knight Ridder. Retrieved August 20, 2014.
  34. 1 2 Larson, Virgil (September 25, 2001). "Customer Services Company Buys Omaha, Neb., E-Commerce Consulting Firm". Knight Ridder. Retrieved August 20, 2014.
  35. ↑ Woodie, Alex. "IBM Sells OS/400 Billing App to CSG Systems". IT Jungle. Retrieved August 20, 2014.
  36. ↑ Davis, Joyzelle (October 11, 2005). "CSG Systems Selling GSS United for $251 Million Company Narrows Focus to Cable and Satellite Customers". Rocky Mountain News. Retrieved August 22, 2014.
  37. ↑ "Comverse Finalizes Acquisition of CSG Systems' GSS Group". Wireless News. December 12, 2005. Retrieved August 22, 2014.
  38. ↑ "CSG International: Investing in an automated future". Capacity Media. October 10, 2012. Retrieved August 8, 2016.
  39. ↑ Keenan, John (July 30, 2007). "CSG is buying Prairie Voice". Omaha World-Herald.
  40. ↑ "CSG completes ComTec buy". Denver Business Journal. July 10, 2007. Retrieved August 22, 2014.
  41. ↑ "CSG Systems to buy DataProse for $39M". Denver Business Journal. April 17, 2008. Retrieved August 22, 2014.
  42. ↑ "CSG Systems buys Quaero". Charlotte Business Journal. January 6, 2009. Retrieved August 20, 2014.
  43. ↑ "CSG Systems International Reports Results for Fourth Quarter and Full Year 2013" (Press release). CSG International. February 4, 2014. Retrieved 2014-10-21.
  44. ↑ Samantha Bookman (December 1, 2010). "CSG Systems wraps up Intec Telecom acquisition". Fierce Telecom. Retrieved August 8, 2016.
  45. ↑ Le Maistre, Ray (July 16, 2012). "CSG Snaps Up Ascade". Light Reading. Retrieved August 22, 2014.
  46. ↑ Dykes, Peter (December 19, 2013). "CSG buys Volubill online charging assets". Telecom Asia. Retrieved August 22, 2014.
  47. ↑ Solutions, CSG International
  48. ↑ "Workforce automation software.". CED. January 1, 2002.
  49. ↑ "CSG Systems' Care Express enables over 5 million consumers to manage cable and satellite accounts online". Wireless Satellite and Broadcasting Newsletter. February 1, 2007. Retrieved August 22, 2014.
  50. ↑ Brown, Karen (June 2, 2003). "CSR software taps subs' minds". Broadband Week. Retrieved August 22, 2014.
  51. ↑ McElligott, Tim (September 15, 2003). "CSG's New Framework Integrating Acquisitions". Telephony. Retrieved August 8, 2016.
  52. ↑ "CSG International Opens Alexandria Office". The Washington Post. March 2, 2014. Retrieved August 20, 2014.
  53. ↑ Steve Anderson (March 3, 2015). "CSG Ascendon Digital Services Platform Launched to Shake Up Digital Services". Tech News. Retrieved August 8, 2016.
  54. ↑ "Invotas Announces Spin Off from Parent Company CSG International". Yahoo. November 9, 2015. Retrieved May 12, 2016.
  55. ↑ Josh Beckerman (February 1, 2016). "FireEye Buys Invotas International". Wall Street Journal. Retrieved August 8, 2016.
  56. ↑ "CSG Systems International, Inc.", Form 10-k, CSG International, February 28, 2014, retrieved August 21, 2014
  57. ↑ "CG Systems International, Inc.". United State Securities And Exchange Commission. Retrieved August 8, 2016.
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