Verint to become independent, public company

Deal announced to ‘buy out’ parent company in share exchange
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Wednesday, August 15, 2012

MELVILLE, N.Y.—If the merger deal with its parent company, Comverse Technology Inc. (CTI), goes through as planned, video surveillance provider Verint will be a 100 percent independent public company as early as February.

“This is really good news, long term, for Verint,” Jeff Kessler, managing director of Imperial Capital, told Security Systems News.

CTI has had complications in the past with the Securities and Exchange Commission filing process, Kessler said, “and if your parent company has filing problems with the SEC, you as a subsidiary have filing problems as well.”

The merger deal, announced Aug. 13, will end those issues, giving Verint a cleaner capital structure and increasing liquidity of the stock available to investors, Kessler said.

Verint’s market cap value is $1.08 billion; its enterprise value is $1.48 billion.

CTI is the holding company that currently has two assets: a 100 percent ownership of a telecom company and a 53 percent interest in Verint. The remaining shares of Verint are publicly traded.

Under the terms of the deal, CTI will spin off the telecom business to Comverse shareholders, at which point “the only asset left is the 53 percent share in Verint,” Alan Roden, Verint SVP corporate development, told SSN. Verint will then acquire Comverse through an exchange of shares. What this does is get rid of Comverse’s majority stake in the company.

Specifically, Verint will buy CTI for approximately 27.5 million Verint common shares and up to an additional $25 million in Verint common shares. The additional shares are related to dividends to which CTI is entitled.

The deal must be approved by Verint and CTI shareholders.