REUTERS - Israeli defense electronics firm Elbit Systems has agreed to buy Nice Systems' cyber and intelligence division for $157.9 million as it seeks to boost its presence in this fast-growing market.
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Elbit, Israel's largest listed defence company, will pay $117.9 million in cash at closure of the deal, expected in the third quarter. An additional amount of up to $40 million will be paid based upon the business' future performance.
Nice's cyber and intelligence division provides law enforcement agencies and intelligence organisations with tools for generating intelligence from communications.
The division will be acquired by CYBERBIT, Elbit's subsidiary that was recently established to consolidate the company's activities in cyber intelligence and cyber security.
"Nice is a well-known world leader in the cyber intelligence industry and its business activities and capabilities are complementary to ours," Elbit Chief Executive Bezhalel Machlis said on Thursday.
Machlis said earlier this week he sees cyber security and intelligence as growth engines for the company, whose drones and surveillance systems are top sellers around the world.
Nice, whose analytical software enables companies to spot fraud and fend off security threats, said the sale would allow it to place greater focus on its core markets.
It said its previous forecast included a full-year contribution from the intelligence division of $80 million in revenue and 9 cents in diluted earnings per share (EPS) excluding one-off items.
For the second quarter its forecast included a contribution of $20 million in revenue and 3 cents in adjusted EPS.
As a result of this agreement, Nice now expects second quarter revenue from its continued operations to be in a range of $229 million to $237 million, compared with a previous forecast of $249 million to $257 million. It estimates second quarter EPS of 64-70 cents, down from 67-73 cents.
For the full year, Nice estimates 2015 revenue of $985 million to $1.005 billion and adjusted EPS of $3.01-$3.12. It expects the sale will be neutral to earnings in 2016.