Morningstar | Verint Bolsters Cloud Customer Engagement Capabilities With ForeSee Acquisition; Maintaining FVE
On Dec. 17, Verint announced the acquisition of ForeSee, a cloud voice of the customer (VoC) vendor, for $59 million in cash, while also updating fiscal 2020 financial guidance. VoC solutions allow customer-facing divisions of an enterprise to track, manage, and glean insights from the customer experience (CX) across a variety of channels. We like the strategic fit, as the deal will allow Verint to embed customer interactions within its software in a more reliable and holistic way, enhancing the analytics and overall viability of their Workforce Engagement Management (WEM) platform. After incorporating the acquisition into our model, we are maintaining our $47 fair value estimate as we view the deal as value neutral.In addition to the $59 million in up-front cash, the deal also incorporates a $6 million deferred payment, which we presume will be contingent on some performance-based criteria. The deal is expected to close during the current fiscal fourth quarter ending in January. For fiscal 2020, management maintained its non-GAAP EPS guidance of $3.50 and raised the midpoint of its sales outlook by $20 million to $1.345 billion.
We are pleased that the firm is allocating capital to enhance its cloud platform. Within WEM, we see economic and technical incentives that will spur extensive cloud adoption longer term. The most salient of the technical incentives, in our view, are the superior data accumulation advantages and accompanying innovation levers that the breadth of data encourages. For example, ForeSee’s cloud deployment model facilitates benchmarking capabilities that are informed by the voluminous CX interaction data of the firm’s diverse customer base. This results in a level of comparative and industry-specific depth that would be difficult to accomplish through a perpetual license delivery model. Continued platform enhancements, in concert with robust switching costs, should allow the firm to maintain its leadership within Customer Engagement.
Verint Systems is a provider of Actionable Intelligence? solutions. The company's segments include: Customer Engagement Solutions (Customer Engagement), which provides a portfolio across a spectrum of customer engagement functions; and Cyber Intelligence Solutions (Cyber Intelligence), which provides security and intelligence data mining software. The company's Customer Engagement products include: automated quality management, automated verification, branch surveillance and investigation, case management, chat engagement, coaching/learning, compliance recording, and customer communities. The company's Cyber Intelligence products include: cyber security, network intelligence suite, and situational intelligence.
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