Verint Systems (VRNT.PK), a 57% subsidiary of Comverse Technology, is acquiring Witness Systems (WITS) in cash for $27.50 per share (press release), a premium of roughly 23% or $5.20 per share compared to yesterday's closing price of $22.27, however not too far from it's last 52 week high of $25.48 back in April 2006. The deal puts an enterprise value of about $950M on Witness Systems, excluding the cash, and with estimated sales of $223M for 2006 that's a revenue multiple of 4.26x. Gross margins are around 70% and revenue growth for the next two years is predicted to be around 15-20% p.a. Witness itself recently acquired its two competitors Exametric and Demos.
Verint Systems' parent Comverse Technology (CMVT.PK) was recently banned to the Pink Sheets (and along with it VRNT) after it had failed to deliver its financial statements on time to the SEC due to an options probe.