January 12, 2012 / 12:01 PM / 8 years ago

UPDATE 3-Openwave explores options for core businesses

* Explores alternatives for mediation and messaging products businesses

* Hires Jefferies & Co as financial adviser

* Shares rise 5 pct

Jan 12 (Reuters) - Openwave Systems Inc said it will explore strategic alternatives for its core service mediation and messaging products businesses as the software maker plans to focus on selling its patents .

The company, which claims to have about 200 patents covering smart devices, cloud technologies and unified messaging that enables mobile devices to connect to the Internet, said it has retained Jefferies & Co as financial adviser for the strategic review.

Openwave’s products businesses could fetch 0.5-1.0 times revenue or about $60-$120 million, Wedbush analyst Scott Sutherland said.

Sutherland said the company’s patents, several of which he believes to be foundational to the mobile Internet and Internet-based messaging, could be valued at around $300 million.

“Messaging business could be interesting in a rollup play or for a private equity buyer, while we see the mediation business as interesting for strategic buyers,” Sutherland, who has an “outperform” rating on the stock, wrote in a note.

Openwave software allows telecom operators like Sprint Nextel and AT&T to give customers wireless access to a variety of data and applications.

The company’s service mediation and messaging businesses accounted for 58 percent of its total revenue in the first quarter. However, product bookings fell 44 percent in the same period.

“We believe our strategy will enable us to derive the maximum value from our... messaging and mediation product lines for both our shareholders and our customers,” Chief Executive Mike Mulica said in a statement.

As consumers increasingly access the Internet on their smartphones and tablet devices, companies have scrambled to protect and monetize their intellectual property related to these technologies, leading to a slew of patent lawsuits.

Openwave’s announcement follows a string of steps since it outlined a restructuring plan in August to refocus its business by monetizing its intellectual property portfolio.

In November, the company said Microsoft Corp became the first company to license its patent portfolio.

In August last year, Openwave had filed patent suits against Apple and Research In Motion .

Shares of the Redwood City, California-based company, which is valued at $151.8 million, were up 5 percent at $1.86 on Thursday morning on the Nasdaq.

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