Nice Systems signs deal to buy Actimize for $280 million
Will be paying $227 million cash and the rest in shares
Nice Systems (Nasdaq: NICE) today announced signature on a definitive agreement to acquire Actimize, for $280 million.
Last week digital recording systems maker Nice Systems announced the transaction to buy Actimize for stock and cash. It will be paying 80% of the consideration, or $227 million, in cash and the rest in 1.5 million Nice shares.
The transaction should close towards the end of the third quarter of 2007, Nice said. Once the deal is finalized, Actimize will operate as a wholly-owned Nice Systems subsidiary and its management will stay in place, the Israeli company says.
The big question about Actimize has been its financials, which are now being revealed.
Ra'anana-based Nice says that it expects Actimize to bring $10 million to $12 million in revenues in the fourth quarter of 2007.
It also admitted that the acquisition should lower its earnings per share by 4-5 cents in the quarter, mainly because it will be making less interest income because of the big cash outlay.
Accordingly, Nice has adjusted its guidance. It now foresees revenues of $497 million to $514 million for the year 2007, and sees lower earnings of $1.31 to $1.42 per share.
Next year, though, Nice expects Actimize to generate revenues of $55 million to $60 million, which means the buyer is predicting growth of 40% to 50%. The acquisition should be earnings accretive from the third quarter of 2008, Nice predicts.
Actimize had been preparing for an initial public offering on Nasdaq, according to a market cap of $300 million. It had hoped to raise about $70 million.
Vertex invested $4.2 million and is getting back $36 million, an eightfold return, of which investors are naturally getting $32 million.
The company's chairman is Avi Ze'evi, managing partner at Carmel Ventures, which is doing well by the exit. As one of Actimize's biggest shareholders with about a quarter of its stock, Carmel is getting about $70 million.
In fact Carmel had led its first financing round and was then, in fact, the only investor. Since then, others have come on board.
Altogether Actimize has raised about $24 million, including from FT Ventures, Giza and Vertex, all of which have done well. Giza had owned 13% and is returning $13.5 million to investors.
During the last five years, Nice Systems has bought five companies, but it ended the first quarter of 2007 with $335 million in cash nonetheless. A few months back it set its cap at the American company Witness, but found itself outmaneuvered by another Israeli company, Verint Systems (Nasdaq: VRNT) of the Comverse Technologies (Nasdaq: CMVT) group.
CEO Haim Shani had broadly hinted in the past that Nice Systems wasn't done expanding through acquisitions. However, what it had in mind was expanding in its security-related area of business, Shani clarified. Actimize is not security-related, it's wholly civilian in its operations.
"Bringing together Actimize's and Nice's solutions establishes Nice as an enterprise-wide analytics powerhouse," commented Nice CEO Haim Shani. "Our combined solution constitutes a technology breakthrough in processing, analyzing, and cross-referencing information from customer transactions and interactions. This is the only combination in the world, which for the first time will be able to take millions and millions of transactions and interactions, and handle huge masses of data, comprising a full view of the customer touch points with the organization."