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Nice Beefs up with Thales Acquisition
Maker of multimedia recording solutions spends $54 million to buy customer facing apps developer
Posted Jul 31, 2002
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Israel-based Nice Systems, maker of multimedia recording solutions for businesses, announced Wednesday it has signed a definitive agreement to acquire Thales Contract Solutions, a developer of customer facing technology for public safety, wholesale trading and call centers. Headquartered in Southampton, England, Thales Contract Solutions is a unit of the Information Technology and Services business area within the $10.3 billion Thales Group, a electronics company that focuses on delivering electronics to the aerospace, defense, and information technology sectors. TCS has a total of 275 employees, 208 in Europe. The stock and cash deal valued at $54 million is slated to close in the fourth quarter of this year, barring any regulatory hurdles. John Hughes, executive vice president and chief operating officer of Thales IT and Service and Tim Robinson, senior vice president of the Secure Operations business group of Thales, will join Nice's board of directors, expanding the number of directors to ten. Officials at Nice Systems, which makes products and solutions are used in contact centers, trading floors, air traffic control sites, closed circuit television security installations and government markets, say the deal gives the company 24 percent of the voice recording and QM market and puts it among the largest player in the call recording and customer experience management applications space. The acquisition of TCS complements both of Nice's core businesses and creates the preeminent global multimedia recording and enhanced applications company. Nice will add TCS's operations serving contact centers and trading floors to its CEM (Customer Experience Management) division, which will be overseen by Jim Park, managing director of TCS, This division is expected to be a $154 million annual revenue business and, with the addition of TCS's public safety business, NICE's Security Group would become a $63 million annual revenue business. The combined company initially will have 326 people in North America, 232 in Europe, 528 in Israel, and 19 in other offices around the world.
"Since there is very little overlap between the two companies' operations, the integration challenges will be quite manageable and we expect this combination to quickly generate significant benefits for customers, partners shareholders, and employees," Haim Shani, chief executive officer of Nice Systems says in a prepared statement. In addition, the company reported a breakeven second quarter compared with a net loss of $7.9 million, or 60 cents per share, in the second quarter of 2001. The company lost $1.2 million, or 9 cents per share, in the first quarter of 2002. For the quarter ended June 20, 2002, Nice posted revenue of $38.2 million compared with $30.5 million for the second quarter of 2001 and $36.1 million for the first quarter of 2002. Product revenue was $32.8 million, up from $27 million in the second quarter of last year and $31.2 million in the first quarter of 2002. Services revenue, which includes professional services and maintenance revenues, was $5.4 million in the quarter compared with $3.5 million in the year earlier period and $4.9 million in the first quarter of 2002. Other highlights of the mostly recently ended three-month period include, a 22 percent increase in product revenue and a 54 percent year-over-year increase in service revenue.
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