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January 6, 2013
MW Transaction Analysis 
Verint Systems Acquires KANA Software
 
Financial Overview
  • Total Transaction Size:                                                  $514 Million
  • Implied Enterprise Value (EV):                                      $514 Million
  • EV/Expected Forward Revenue:                                      3.4x - 3.7x
  • EV/Expected Forward EBITDA:                                    11.4x - 12.9x               
Transaction Facts
  • Verint Systems (NASDAQ:VRNT), a data-analysis and security software maker, announced today that it had signed a definitive agreement to acquire KANA Software, a customer service and cloud solution provider, for $514 million.
  • According to the press release, Verint expects KANA to generate non-GAAP revenue of approximately $140-150 million and non-GAAP EBITDA of $40-45 million in 2014.
  • KANA Software, which is a portfolio company of Accel-KKR, was first acquired by the private equity firm in 2009 for $41 million.
  • The deal will be financed by approximately $100 million of Verint's cash, $300 million from incremental term loans and the rest from Verint's revolving credit.
  • Shares of Verint closed up 9.2% on news of the deal.
Adding Cloud Capabilities to Strengthen An Existing Value Proposition
  • Broadening Capabilities for Providing Services: With this acquisition, Verint is moving to expand its set of capabilities into higher-growth services markets. After the acquisition, Verint's 10,000 customers (joined by KANA's 900) will be able to implement a single-vendor suite to manage their customer engagement.
  • Turning to the Cloud: KANA's solutions offerings cover both on-premise support and cloud alternatives, providing new means with which Verint can reach out to its global network of customers.
  • Transformation Through PE Investment: Following its acquisition by Accel-KKR, KANA grew its global presence by acquiring software companies in the customer service vertical in Ireland, the U.S., the U.K. and the Netherlands.
  • Low Interest Rates Continuing to Spur M&A: Verint is only funding $100 million of the purchase price with cash, fueled by the M&A-friendly, low-interest environment.
For more information, read the press release.

martinwolf was not the advisor in this transaction.

About martinwolf    

 

                
             San Francisco, CA                                                Bangalore, India

With offices in San Francisco and Bangalore, India, martinwolf is a leading middle market M&A Advisory focused on companies with services-based business models. Since 1997, our team has completed more than 115 transactions in nine countries. We are a five-year member of the Merrill Lynch PS Referral Network, and were selected as ICICI Bank's (India's leading private bank) exclusive strategic partner for acquiring U.S. IT companies. 

 

The firm is also a presenting sponsor of the Global IT M&A Forum

 

martinwolf is a member of FINRA and SIPC. For more information, visit www.martinwolf.com.

 

To learn more about martinwolf, contact Matthew Putzulu at mputzulu@martinwolf.com.

 

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