Concerto will buy rival for $1 billion

Concerto Software, a Westford company that makes technology for corporate and government call centers, yesterday agreed to buy a Silicon Valley rival for $1 billion, the latest megadeal that turns a public company private.

Aspect Communications of San Jose, Calif., is set to become part of privately held Concerto as soon as September, with an unspecified number of layoffs likely at the 1,600-employee firm. Concerto itself used to be a publicly traded company called Davox Corp. that private equity firms Golden Gate Capital of San Francisco and Oak Investment Partners of Westport, Conn., took private last year after a series of mergers.

With the stock market weak and wealthy investors pumping billions into hedge funds and private equity firms, private ''takeouts" of public companies, like the Concerto-Aspect deal, are proving popular. Boston's Bain Capital and six other firms, for example, are pressing an $11 billion takeover of SunGard Data Systems that would take the public financial services software company private. Retailer Toys ''R" Us is also being taken private in a $6 billion deal.

Following Cox Communications' conversion to private ownership last year in the face of weak Wall Street interest in cable stocks, the family that owns a big interest in Cablevision Systems Corp. is also pushing a plan to take Cablevision private.

''We're going to be seeing more of this, given that the market is so soft and so much money is going into private equity," said James Andrew, a vice president at Boston consulting firm Adventis. With all the headaches for corporate managers created by the new Sarbanes-Oxley accounting disclosure rules, Andrew added, more and more executives ''are asking: Does it really make sense to be a public company anymore?"

Barry S. Rosenstein, founder of Jana Partners, a San Francisco hedge fund, estimated last month that private equity investors now have enough assets to take private 30 percent of the public companies in the United States.

Concerto president James Foy, who will head the combined company, said the deal would create a bigger, more efficient company with a wider range of products. Concerto provides call center technology for companies including American Airlines, Federal Express, Lands' End, and Verizon Communications Inc., with a special focus on technologies used for completing bill collection and marketing calls from a call center. Aspect's customers include Citigroup Inc. and the Internal Revenue Service, and it focuses more on software used to handle ''inbound" calls coming in to call center agents.

''My sense is the big private equity players are trying to make a big enough contact center company that can go back out again in a public offering," said Peter Shields, chief executive of SoundBite Communications Inc., a Burlington company that makes technology for companies to send prerecorded marketing and bill collection messages to customers.

Concerto is offering Aspect shareholders $11.60 per share in cash. That is a 15 percent premium over Aspect's average closing price for the last 30 trading days. Aspect's stock has dropped about 19 percent in the last year, and the company warned yesterday it would miss sales forecasts for the current quarter. Aspect reported net income of $61.3 million last year on sales of $370.4 million.

Lawrence Byrd, director of communications applications for Avaya, which has its corporate roots in the old AT&T Corp. and competes with Aspect and Concerto in the call center business, said with the growth of Internet phone systems and Web- and e-mail-based customer service, ''It's a complex business that lends itself to larger, holistic solutions." But, Byrd said, in the case of Concerto and Aspect, ''what's being acquired here is clearly Aspect's customer base."

Peter J. Howe can be reached at howe@globe.com.