Shares of Israeli-American analytics firm Verint Systems rose in after-hours trading Wednesday after its board approved a plan to spin off its cyber intelligence business into a separate, publicly-traded company.
After the spinoff, Verint will consist only of the larger customer engagement solutions business, with current shareholders owning shares in both Verint and the spinoff company.
Company officials said the board’s vote to approve the deal culminates a long process during which Verint had already substantially separated the sales, services, marketing, product management and R&D organizations of the two businesses to give them more operational agility.
“We have built two strong, but increasingly distinct businesses, and we believe that separating these two businesses at this stage of their evolution will allow each to unlock its full potential,” Verint CEO Dan Bodner said in a news release.
On news of the split, Verint shares jumped 6.9% to $51.10 in the extended session Wednesday.
Verint has recently been under pressure from shareholder Neuberger Berman Investment Advisers, which said its “reluctance to embrace a cloud business model, inefficient conglomerate structure, poor capital allocation practices and misaligned executive compensation programs” had contributed to “persistent underperformance.”
Neuberger also questioned why the customer engagement and cyber intelligence divisions continued to be part of the same company, noting that they “serve different markets, have disparate products and service offerings, and do not share operational synergies.”
Verint’s customer engagement business provides customer interaction and workforce optimization solutions while the cyber intelligence business focuses on security and intelligence data mining software.
In connection with the separation, Verint said private equity firm Apax Partners will invest $400 million in the customer engagement company, giving it a minority interest of between 1.5% and 15%.
“Verint’s customer engagement business is a market leader and we look forward to working with management to execute its cloud strategy and extend its market leadership,” Jason Wright, a partner at Apax, said.