Verint Systems Inc., a maker of security software, agreed to buy Comverse Technology Inc. for as much as $805.7 million after a telecommunications unit spinoff, streamlining its ownership structure.
Comverse shareholders will receive 27.5 million Verint shares valued at $780.7 million, based on Verint’s Aug. 10 closing price, plus as much as an additional $25 million, the companies said in a statement. A spinoff of the Comverse Inc. unit is expected to close in October, and the merger is set to be completed in the fiscal first quarter ending in April 2013.
The sale comes two years after Comverse Technology, emerging from an accounting scandal, said it was “exploring strategic and capital raising alternatives.” Comverse Chief Executive Officer Charles Burdick took over from Andre Dahan in March 2011 following a period of financial restatements and a stock-options backdating scandal that led to federal charges against former CEO Jacob “Kobi” Alexander.
“This agreement, along with the planned spinoff of Comverse Inc., will result in a tax efficient distribution to our shareholders and direct ownership in two independent, well-capitalized publicly-traded companies,” Burdick said in the statement.
The shares of New York-based Comverse rose 1.6 percent to $5.79 at the close in New York. Shares of Melville, New York-based Verint declined 1.8 percent to $27.87.
Comverse Technology currently holds about 41 percent of Verint’s basic outstanding shares and all of Verint’s outstanding convertible preferred shares, the companies said.
Goldman Sachs Group Inc. and Rothschild Inc. advised Comverse Technology.