MP Entry for Upcoming Spin, VFC Exits
Customer engagement and cyber intelligence services provider Verint Systems, Inc. (VRNT) shows significant upside both pre- and post-Spin of the latter of its segments in early 2021, so we are entering a small stake now while we await a Form 10. We expect the company to narrow its valuation discount to its peers, and we recommend investors also take advantage of current levels. Meanwhile, we are exiting VF Corp. (VFC) from the portfolio to make room for this new idea.Spin Announcement & Rationale...
In December 2019, global analytics provider Verint Systems, Inc. (VRNT) announced its plan to separate into two listed companies by the end of January 2021, citing the two businesses had become increasingly distinct in their operations. The Spinoff is intended to be tax-free to shareholders and will see the Parent retain its Customer Engagement Solutions segment, while the Spinoff will consist of the Cyber Intelligence Solutions business (accounting for approximately 35% of total FY20 revenues). As per the announcement press release, the management believes the separation will allow for both companies to “pursue their own strategies, drive opportunities to accelerate growth and extend their leadership,†and provide investors with an opportunity to “evaluate and make independent investment decisions in each business.â€
Private Equity Involvement...
Apax Partners, a leading global private equity firm that invests across the Technology, Telecom, Services, Healthcare and Consumer sectors, has built up a stake of 5.79% (listed as a top shareholder as Valor Parent LP) through its $200 million investment (completed May 7, 2020, 8K filing here) and a second investment of up to $200 million at the time of separation into the new customer engagement business. That second investment will increase Apax’s ownership in the customer engagement business to between 11.5% and 15%. In coordination with the first investment, Apax’s partner Jason Wright (with 20 years of tech private equity experience) has been appointed to VRNT’s board.
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.
The Edge Group - Global Fundamental Catalyst Investing. The Edge provides investors with access to hidden corporate value from Global Special Situations using a pioneering approach to investments. Founded in 2005 by fund management and investment banking professionals to provide high quality, private equity-level research on Global Corporate Divestitures for the benefit of fundamental event-driven, growth and value-oriented investors in this difficult to track, but proven investment space.
The Edge will look to screen and analyze include Spinoffs; Reverse Morris Trusts; Squeeze Outs; Privatizations; Demutualization; Deep Discounted; Rights Issues; Rights Offering; Restructuring; Insider Purchases / Buying Change of Management / CEO Change; Deteriorating fundamentals; Post-Bankruptcy; Reorganization; Tender Offer; M&A Deals; Secondary Offering; Share Swap; Thrift Conversions; Share Buybacks; Activist; Mergers. All analyzed from a fundamental point of view.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.