Verint Systems Inc. (Nasdaq: VRNT) will acquire its parent company, Comverse Technology Inc. (Nasdaq: CMVT), after the latter closes the previously announced sale of its telecom business, Starhome BV and the spinning off of its core business Comverse Inc.
A newly formed wholly-owned subsidiary of Verint will acquire Comverse Technology's 27.5 million shares in Verint (41% of the company) in exchange for Verint shares, and will also allot to acquire Comverse Technology's shareholders up to additional $25 million in additional Verint shares, depending on the timing of the distribution of Comverse Technology's non-Verint assets. Comverse Technology also owns all of Verint’s outstanding convertible preferred shares which, if converted, will give Comverse Technology a 53.7% stake in Verint. The payment for these shares is equivalent to two years of dividends that Comverse Technology would have received from Verint. Based on Verint and Comverse Technology's current share prices, and assuming $25 million in new Verint shares, the allocation will be 0.13 Verint shares per Comverse Technology share.
Verint president and CEO Dan Bodner said, “We look forward to becoming a non-controlled and independent public company. Clarifying our ownership structure is a significant positive for Verint as we continue to focus on increasing shareholder value." He added, "The elimination of the convertible preferred stock and dividend will simplify Verint’s capital structure and the distribution of Verint’s shares directly to Comverse Technology’s shareholders will significantly increase Verint’s public float and liquidity for investors.
Comverse Technology chairman and CEO Charles Burdick said, "This agreement, along with the planned spin-off of Comverse Inc., will result in a tax efficient distribution to our shareholders and direct ownership in two independent, well-capitalized publicly-traded companies." He added, "Our spin-off of Comverse Inc. remains on track for the end of October, and we expect the merger transaction to close in the first fiscal quarter ending April 30, 2013.
Verint's share price closed at $28.39 on Friday, giving a market cap of $1.11 billion, and Comverse Technology's share price rose 3.7% in premarket trading today to $5.91, giving a market cap $1.25 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2012
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