Verint to Buy Kana for $514 Million

Acquisition by former Comverse unit aims to create single package of analytical software for companies.

Verint Systems, a business intelligence and security company, said yesterday it had agreed to buy California’s Kana Software for $514 million, to create a single package of products that help organizations capture and analyze voice, video and text data.

Verint will finance the cash purchase using $100 million in cash reserves, approximately $300 million in loans and the remainder from the company’s revolving credit facility. The deal is expected to be completed by April 30, the end of Verint’s first fiscal quarter.

“There is a strong cultural fit between the two companies and a foundation for a successful future together, for both our current and prospective customers, as well as our employees,” Verint CEO Dan Bodner said in a statement.

Shares of Verint were up 6.5% to $45.15 on Wall Street late morning New York time.

Kana is expected to generate between $140 million and $150 million in non-GAAP revenue, and $40 million-$45 million in non-GAAP earnings before interest, taxes, depreciation and amortization for the 2014 calendar year, Verint said.

Once a subsidiary of the Israeli technology company Comverse Technology, Verint bought out Comverse’s stake last year when the latter was liquidated. Verint specializes in providing analytic software and hardware for security and business intelligence. Although headquartered in Melville, New York, many of the company’s employees are in Israel.

Silicon Valley-based Kana is owned by private equity firm Accel-KKR and specializes in on-premises and cloud data solutions for large and medium-size enterprises. The company has 900 customers, which include government agencies and many Fortune 500 companies.

The acquisition will allow Verint to provide clients with a full complement of software and services to analyze customer and employee data to maximize consumer engagement and employee performance, Verint said. The company said the acquisition of Kana Software would also benefit the combined company by creating a larger R&D operation to create new products.