Comverse Technology Inc, which owns 57% of Verint, is helping fund the deal by purchasing $293m of perpetual preferred stock from Verint. Verint is funding the rest of the deal through $650m of debt financing. The news immediately pushed the Witness stock price up by just over 21%, to a high of $27. If Witness shareholders approve, the deal should close in the second quarter.
All three parties have been dogged by financial problems.
Comverse and Verint were delisted from the Nasdaq on February 01, 2007 due to options-related issues resulting in the failure to file on time and Witness is under threat of delisting for failure to file on time.
For fiscal 2005, the last year Verint filed full results, it achieved revenue of around $300m. Witness posted revenue of around $185m for the same period, which was also the last time it filed full year results.
The transaction is expected to create an operation similar in size to that of privately owned rival Aspect Communications Inc, which was formed as the result of a $1bn transaction between Aspect and Concerto Software in September 2005.
Witness has been at the center of acquisition talk for several months now, with both competitor Nice Systems and IBM rumoured to be interested.
Verint has great expectations for the new entity: The convergence of Witness’ workforce optimization and Verint’s actionable intelligence will create a broad portfolio of contact center and enterprise performance solutions, delivering a compelling new vision for the customer-centric enterprise, said Verint in a statement.
According to Dan Bodner, president and CEO of Witness, speaking during a conference call to discuss the acquisition: by adding analytics to [Witness’s] offering, these functions will be enhanced, because now you have the ability to look into each customer interaction and enhance the way agents are scheduled, [improve] e-learning and improve the customer experience.
As well as improving call centre operations, the company is also looking to use Witness to extend analytics and workforce management beyond the call centre and into the enterprise.
The combined companies will be able to cover a lot of application ground with a portfolio that includes quality monitoring, IP recording, multimedia interaction capture, speech and data analytics, performance management, contact center and enterprise workforce management, eLearning and eCoaching, and customer feedback management.
Verint will be hoping that the breadth of its portfolio will be the catalyst for additional sales, as organizations continue to look to their customer service operations and the quality and consistency of their interactions with their customers for competitive advantage.
