Comverse Technology is being acquired by Verint Systems Inc. in an all-stock deal that will free Verint from Comverse's majority control.
Comverse Technology Inc., which makes voicemail and cellphone billing software, will spin off its telecommunications business, Comverse Inc., prior to the transaction with Verint. The spinoff is expected to be complete by October's end.
Comverse Technology currently holds about 41 percent of Verint's outstanding common stock and all of its outstanding convertible preferred shares. If that stock was converted, New York-based Comverse would own 53.7 percent of Verint, which is based in Mellville, N.Y.
As part of the deal, Comverse Technology will receive about 27.5 million Verint shares and up to an additional $25 million in Verint stock.
The company estimated that Comverse Tech shareholders will get about 0.13 shares of Verint for each share held.
In morning trading, shares of Comverse Technology added 6 cents to $5.76. Over the past year, the stock has traded between $5.13 and $7.45.
Verint shares added 16 cents to $28.55.
This agreement, along with the planned spin-off of Comverse Inc., will result in a tax-efficient distribution to our shareholders and direct ownership in two independent, well-capitalized publicly-traded companies," Comverse Technology Chairman and CEO Charles Burdick said in a statement.
Comverse Technology and Verint's boards have approved the transaction. Verint's board includes four Comverse-affiliated directors. The company said Monday that it expects two of those board members will be replaced with independent directors before the acquisition closes. The remaining two Comverse-affiliated directors are expected to resign when the acquisition occurs.
The acquisition still needs the approval of Verint and Comverse Technology shareholders and a majority of Verint common stock not held by Comverse or its subsidiaries.
The transaction is expected to close in 2013's first quarter.