DEFM14A: Verint Systems to Go Private in $20.50/Share Cash Merger

Verint Systems Inc. stockholders are invited to a special meeting on November 18, 2025, to vote on a proposed merger with Calabrio, Inc., an affiliate of Thoma Bravo, for $20.50 per share in cash.

Summary

• Verint Systems Inc. has entered into a Merger Agreement with Calabrio, Inc. (Parent) and Viking Merger Sub, Inc. (a wholly-owned subsidiary of Parent, affiliated with Thoma Bravo, L.P.).
• Merger Sub will merge into Verint, with Verint surviving as a wholly-owned subsidiary of Parent.
• Common stockholders will receive $20.50 in cash per share, representing an approximately 18% premium over the 10-day volume weighted average share price up to June 25, 2025 (the unaffected date).
• Preferred stockholders will receive $1,000 in cash plus any unpaid accrued and accumulated dividends per share.
• The Board of Directors unanimously recommends stockholders vote FOR the Merger Proposal, FOR the Compensation Proposal, and FOR the Adjournment Proposal.
• A special meeting of stockholders will be held virtually on November 18, 2025, at 9:00 a.m. Eastern Time, to vote on the merger.
• As of October 14, 2025, there were 60,594,610 shares of Common Stock and 400,000 shares of Preferred Stock outstanding, representing approximately 70,181,755 total votes.
• Certain stockholders, including affiliates of Apax Partners, owning approximately 14.5% of the voting power, have agreed to vote in favor of the Merger Proposal.
• The merger is expected to be consummated before the end of Verint's current fiscal year (January 31, 2026), assuming satisfaction or waiver of all conditions.

Sentiment

Score: 7

Explanation: The merger offers a significant premium and immediate liquidity to shareholders, backed by unanimous board recommendation and a financial advisor's fairness opinion. While there are standard merger-related risks and the opportunity cost of future standalone growth, the deal provides a clear exit at a favorable valuation relative to recent trading and market conditions.

Positives

• The merger provides certainty, immediate value, and liquidity to all stockholders of Verint at $20.50 per share.
• The Merger Consideration represents a premium of approximately 18% over the 10-day volume weighted average share price of the Common Stock on NASDAQ up to June 25, 2025 (the unaffected date).
• The Board believes the $20.50 per share is the highest consideration reasonably obtainable after extensive negotiations and a strategic review process.
• The Merger Agreement includes terms that enhance closing certainty, such as the absence of a financing condition and specific performance rights for Verint.
• Parent has obtained committed debt financing for the merger, and Thoma Bravo Fund XIV, L.P. has committed to backstop Parent's termination fee obligations.
• Jefferies LLC provided a fairness opinion to the Board, stating the Merger Consideration is fair from a financial point of view to common stockholders.

Negatives

• Verint's public stockholders will not participate in any future growth potential or benefit from any future increase in Verint's value as a private company.
• There is a possibility that all conditions to the merger will not be timely satisfied or waived, leading to significant costs, business disruption, and potential adverse effects on the stock price if the merger is not consummated.
• Restrictions on the conduct of Verint's business prior to the completion of the merger may delay or prevent strategic initiatives.
• The merger involves significant costs for Verint, many of which are payable whether or not the merger is consummated.
• The completion of the merger requires regulatory approvals (HSR Act, non-U.S. antitrust, FDI laws), which could lead to delays or conditions.
• Parent's liabilities for monetary damages for breaches under the Merger Agreement are capped at $112,678,299.
• The $20.50 per share consideration is less than the 52-week high closing price for the Common Stock, and the price might have increased further as a standalone company.
• The transaction will be taxable for U.S. federal income tax purposes for common and preferred stockholders.
• The Merger Agreement precludes Verint from actively soliciting alternative acquisition proposals after the no-shop period, and Verint may be obligated to pay a $50,000,000 termination fee under certain circumstances.

Risks

• The proposed Merger may not be completed in a timely manner or at all, which may adversely affect Verint's business and the price of the Common Stock.
• Failure to satisfy any of the conditions to the consummation of the Merger, including the receipt of certain regulatory approvals.
• The failure to obtain the Stockholder Approval.
• The occurrence of any fact, event, change, development or circumstance that could give rise to the termination of the Merger Agreement, including in circumstances requiring Verint to pay the Company Termination Fee.
• The effect of the announcement or pendency of the proposed Merger on Verint's business relationships, operating results and business generally.
• Risks that the proposed Merger disrupts Verint's current plans and operations.
• Verint's ability to retain and hire key personnel and maintain relationships with key business partners and customers, and others with whom it does business, in light of the proposed Merger.
• Risks related to the diversion of management's attention from Verint's ongoing business operations.
• Unexpected costs, charges or expenses resulting from the proposed Merger.
• The ability of Parent to obtain financing for the proposed Merger.
• Potential litigation relating to the proposed Merger that could be instituted against the parties to the Merger Agreement or their respective directors, managers or officers, including the effects of any outcomes related thereto.
• Certain restrictions during the pendency of the proposed Merger that may impact Verint's ability to pursue certain business opportunities or strategic transactions.
• The uncertainty of the current and future outlook for the CX market, including the impact of AI, investor perspectives, and increased competition from hyperscalers, AI vendors, CRM vendors, CCaaS vendors, and homegrown tools.
• Risks related to succession planning and the need to identify experienced personnel to fill director and executive leadership roles, including a successor to CEO Dan Bodner (67, served over 30 years).

Future Outlook

Verint will cease to be a publicly traded company, becoming a wholly-owned subsidiary of Calabrio, Inc. (an affiliate of Thoma Bravo). Its Common Stock will be delisted from NASDAQ and deregistered under the Exchange Act, meaning Verint will no longer file periodic reports with the SEC. The merger is anticipated to close before the end of Verint's current fiscal year (January 31, 2026).

Management Comments

• Dan Bodner, Chairman and Chief Executive Officer, encourages stockholders to vote to approve the Merger that the management team and the Board view as highly beneficial to stockholders.

Industry Context

Verint operates in the Customer Experience (CX) Automation market, which is undergoing a transition to CX automation, significantly impacted by AI. The industry faces an increasingly competitive landscape with new entrants including hyperscalers, AI vendors, CRM vendors, CCaaS vendors, and customers developing homegrown AI tools. This has led to trading multiple compression for incumbent CX companies due to the 'AI overhang' on the industry.

Comparison to Industry Standards

• Jefferies LLC conducted a Selected Public Companies Analysis, comparing Verint to 8x8, Inc., Five9, Inc., NICE Ltd., RingCentral, Inc., and Zoom Communications, Inc., using EV/CY 2025E Adjusted EBITDA multiples ranging from 6.5x to 9.7x and EV/CY 2026E Adjusted EBITDA multiples from 6.0x to 9.0x.
• Jefferies LLC performed a Selected Transactions Analysis, reviewing 12 historical M&A transactions in the enterprise software industry since May 2013, including targets like SolarWinds Corporation, Kofax, CDK Global Inc., and McAfee Corp., with EV/LTM Adjusted EBITDA multiples ranging from 8.2x to 10.9x (25th to 75th percentile).
• The discounted cash flow analysis by Jefferies indicated an implied per share equity value reference range of $18.43 to $23.99, compared to the Merger Consideration of $20.50 per share.

Management Changes

Corporate Governance

Legal Proceedings

• Potential litigation relating to the proposed Merger that could be instituted against the parties to the Merger Agreement or their respective directors, managers or officers.
• Any demand or proceeding for appraisal or the fair value of any shares of Common Stock pursuant to the DGCL in connection with the Merger Agreement.

Related Party Transactions

• Affiliates of Apax Partners, who own all shares of Preferred Stock and approximately 14.5% of the total voting power, have entered into Support Agreements to vote in favor of the Merger Proposal.
• Verint's executive officers hold equity-based awards that will accelerate and vest in full in connection with the Merger, and are eligible for retention bonuses and severance payments/benefits under pre-existing employment agreements.
• Certain executive officers are party to employment agreements that provide for a gross-up payment for any excise taxes under Section 4999 of the Internal Revenue Code, or a net better cutback provision.

Stakeholder Impact

• Shareholders: Will receive $20.50 cash per common share, providing immediate liquidity and a premium, but will no longer have an ownership interest in Verint or participate in future growth.
• Employees: Continuing employees will receive comparable base salary/hourly rates and target annual cash incentive opportunities for the Covenant Period (until Dec 31, 2026 or Dec 31, 2027). Employee benefits (excluding certain types) will be no less favorable. Severance plans will be honored. Equity awards will convert to cash-based awards with continued service-based vesting.
• Customers, Suppliers, Partners: Potential negative effects on business relationships due to the public announcement and pendency of the Merger.
• Directors and Executive Officers: Will receive accelerated vesting of equity awards, retention bonuses, and severance benefits, and continued indemnification and insurance coverage.

Next Steps

• Stockholders to attend and vote at the Special Meeting on November 18, 2025, on the Merger Proposal, Compensation Proposal, and Adjournment Proposal.
• Parent to withdraw and resubmit its HSR Act notification the week of October 20, 2025, restarting the waiting period.
• Verint and Parent are requesting early termination of the HSR waiting period.
• The merger is expected to be consummated before the end of Verint's current fiscal year (January 31, 2026).
• Following the Effective Time, Verint's Common Stock will be delisted from NASDAQ and deregistered under the Exchange Act.
• Verint will cooperate with Parent on cash funding and the termination of Capped Calls.
• Verint, in cooperation with Parent, will seek an Israeli Tax Ruling or an Interim Tax Ruling regarding the tax treatment of Company Common Stock and Equity Awards subject to Israeli tax law.

Key Dates

Recommendation

The proposed merger offers a fixed cash price of $20.50 per share, representing an 18% premium over the unaffected price. With the stock currently trading at $20.23, there is limited upside from the current market price. While the deal provides immediate liquidity and a premium, investors should consider the opportunity cost of not participating in potential future growth as a standalone entity, especially given the company's focus on AI. For investors seeking certainty and a modest premium, holding until the merger closes is appropriate, but there is minimal arbitrage opportunity.

Keywords

Verint Systems, Calabrio, Thoma Bravo, Merger, Acquisition, CX Automation, Software, Technology, Private Equity, SEC Filing, Proxy Statement, VRNT