In a move to boost revenues and expand its European presence, Cincinnati's Convergys Corp., the billing and customer care provider, Tuesday said it agreed to buy Britain's Geneva Technology Ltd. in a stock swap valued at $693 million.

        The acquisition, the largest in Convergys' history, calls for the exchange of 17.6 million of its shares for all of privately held Geneva. Convergys' shares fell 2 percent Tuesday to $38.52, down 83 cents.

        The company said the purchase, expected to be completed next month, would have no impact on its Cincinnati operations. Geneva will operate as a wholly owned subsidiary of Convergys.

Orr

        The deal will allow Convergys to offer additional licensed software products, Convergys chairman and chief executive James Orr said.

        Overseas expansion has been a primary objective of Convergys under Mr. Orr. Last year, international revenues were about 6 percent of Convergys' $2.16 billion in revenues.

        With 400 employees and revenues last year of $29 million, 4-year-old Geneva is one of Europe's fastest growing providers of billing software for telecommunications providers, utilities and online market providers. The company has 40 clients including British Telecom.

        Unlike Convergys, which provides a complete billing software system, Geneva provides core billing, rating and usage software to which customers can add other features.

        Convergys said its end-to-end systems would benefit by including Geneva's flexible billing component.

        Geneva expects sales this year of $70 million, increasing to $125 million in 2002 and $210 million in 2003.

        Convergys said dilution could reduce share earnings by as much as 15 cents this year and 11 cents next year. Cost savings and revenue growth could reduce earnings-per-share dilution to 11 cents this year and 5 cents next year, Convergys said.

        And under new purchase accounting rules proposed by the Securities and Exchange Commission, Convergys would no longer amortize goodwill from past acquisitions. That would increase share earnings by 16 to 18 cents annually, offsetting the Geneva purchase.

        Steve Mygrant, director of equity research at Fifth Third Bancorp, said the acquisition gives Convergys broader customer exposure, access to next-generation technology, increased revenues and higher profits.

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