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Investing.com - Needham downgraded Verint Systems (NASDAQ:VRNT) from Buy to Hold following the announcement of the company’s acquisition by Thoma Bravo. The stock has shown strong momentum recently, with a 5.2% gain in the past week.
Verint Systems announced Monday its intention to be acquired by Thoma Bravo for $20.50 per share, representing a total enterprise value of $2 billion. The deal price represents a premium to the company’s current market capitalization of $1.22 billion. The transaction values Verint at approximately 14 times enterprise value to free cash flow based on Needham’s current year free cash flow estimate of $145 million.
Needham believes the transaction validates Verint’s product strategy implemented several years ago to capture the emerging AI bot opportunity for contact center use cases built on their extensive data library.
The research firm noted the opportunity to combine Verint’s operations with Calabrio would create a market leader in workforce engagement management with nearly 40% market share, enhancing cross-sell opportunities between the two companies.
The combined entity would gain a more dominant market position and have the opportunity to streamline sales and marketing operations, according to Needham’s analysis of the deal.
In other recent news, Verint Systems has announced a definitive agreement to be acquired by Thoma Bravo, a private equity firm, in an all-cash transaction valued at $2 billion. This acquisition will provide Verint shareholders with $20.50 per share in cash, reflecting an 18% premium over the company’s 10-day volume-weighted average share price prior to the emergence of sale rumors. Following the acquisition announcement, TD Cowen downgraded Verint Systems from Buy to Hold and adjusted its price target to $20.50 from $33.00. Rosenblatt also revised its price target for Verint Systems to $20.50, maintaining a Neutral rating on the stock. Evercore ISI has kept its "In Line" rating with a $23.00 price target, noting that discussions about the acquisition were speculative before the official announcement. The deal marks a significant move for Verint Systems, which had been in advanced talks with Thoma Bravo, as reported by AMC Money. These developments are crucial for investors monitoring the company’s strategic direction and financial outlook.
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