Verint buying Comverse for up to $780.7 mln

Verint Systems Inc.
plans to acquire its holding company, Comverse Technology Inc.
for at least $780.7 million in stock after Comverse Technology spins off its telecommunications billing software unit.

In January, Comverse Technology said it planned to distribute all shares of Comverse Inc. to shareholders in the second half of the fiscal year and eliminate the holding company structure in order to create a more efficient corporate structure for the mobile Internet services firm.

Comverse Technology has a market value of $1.25 billion. It holds about 41% of Verint’s stock outstanding and all of Verint’s convertible preferred shares, which, if converted, would result in Comverse Technology holding about 53.7% of Verint’s stock outstanding.

Verint said it will issue about 27.5 million shares to acquire Comverse Technology, a number of shares equal to Comverse Technology’s ownership on an as-converted basis at the expected close of the transaction, which is during the fiscal first quarter ending April 30. Verint will also issue up to an additional $25 million of stock based on the timing of the Comverse Inc. distribution.

Verint’s nine-person board currently includes four Comverse Technology-affiliated directors. Before the merger closes, Verint expects to replace two of these affiliated directors with independent directors and the remaining Comverse Technology-affiliated directors are expected to resign.

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Shares of Verint closed Friday at $28.39 and were inactive premarket. Shares of Comverse Technology were up 6.1% at $6.05 premarket. Both were halted in premarket trading.

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