Verint Systems Acquires KANA Software for $514.2 million in Cash

The United States based company Verint Systems Inc. (NASDAQ: VRNT) has completed the acquisition of KANA Software for $514.2 million in Cash on 3^rd February 2014. KANA Software is a portfolio company of a technology focused investment firm named Accel‐KKR. 

 

Verint System is one of the leading providers of analytics software. The company is headquartered in Melville, New York, with offices across the globe. The company has gone through series of acquisition following a strategy of organic growth in the few years.  

Accel-KKR portfolio company, KANA Software is a California based company provides software solutions for service experience management (SEM) to large and mid-size organizations.

The private equity firm Accel-KKR has brought the KANA Software in December 2009. The company has supported KANA Software through investments in order to achieve organic growth.  

Quippi Raises $2 Million for International Money Transfers

Another United States based international shopping card company named Quippi, has secured a financing of $2 million for International Money Transfers socalTech.com. The financing came from an early stage venture capital fund named Avalon Ventures.

Quippi is a shopping card company which sells gift cards throughout the United States. The gift cards help the people to support their relatives or friends who are living abroad. The company trade through its retail store, company website and a group of sales representative.   

The venture capital firm, Avalon Ventures is a California based company which offers investment in growth, seed, venture and early stage companies. The company seeks to invest in various sectors which include pharmaceuticals, media, technology, life science, software and others.

Paylocity Files for $115 Million in its Initial Public Offering

Paylocity, the United States based company which provides payroll services and human resource software solutions to small and mid-market clients and employees has filed for an initial public offering to raise up to $115 million.

The company is in filing with Securities and Exchange Commission and is planning to be listed on the NASDAQ exchange under the symbol PCTV. William Blair, Deutsche Bank and BofA Merrill Lynch are listed as joint bookrunners on the deal, according to NASDAQ and no pricing information were disclosed.

Paylocity has experienced growth in the last few years which has led the company to made in Deloitte's Technology Fast 500 list in 2013. The company has registered a sales of $91 million in 2013. Paylocity is one of the fastest growing telecommunication, technology, media, life sciences and clean technology companies in North America. Paylocity CEO Steve Beauchamp has utilized the company's technology and exceptional combination of services for the company's growth.

Fiat to buy rest of Chrysler for $4.35 billion

Turin based Italian automobile manufacturer, Fiat S.p.A., has announced to buy remaining stake of Chrysler Group LLC.  Fiat will acquire 41.46% stake of Chrysler from United Auto Workers' VEBA trust, and in-turn Chrysler will receive in total $4.35 billion.  This agreement has aborted the chances of Initial Public Offering (IPO) of Chrysler Group.

Chrysler is one of "Big Three" American automobile manufacturers behind Ford and General Motors.  Company was founded by  Walter Chrysler in 1925.  Company was well run till the crisis of 2008-2010.  It received loans from US government to avoid shutting down.  But company filed for reorganization under Chapter 11 bankruptcy protection in April 2009.  Post reorganization company was owned by United Auto Workers pension fund, Fiat, United States and Canadian government.  Gradually Fiat acquired other's stake and became principle owner with 58.54% stake.    

This agreement is expected to close by January 20, 2014 and will make combined company seventh largest automobile manufacturer in the world.  Fiat will pay $1.75 billion in cash, Chrysler will make contribution of $1.9 billion.  Additional $700 million will be paid over a period of four years in annual installments.

This pricing move is supposedly the biggest victory for savvy Mr. Merchionne, Fiat's CEO.  The pricing is much less than $36 billion Daimler-Chrysler paid for the company in 1998 or $ 7.4 billion paid by Cerberus Capital Management paid for 80% stake in company in 2007.  Moreover company's sales has increased from a while with the success of its new models

Although Chrysler and Fiat have shared platforms and teams for year, the consolidation move will make financial statements more clear and will make product development and Research more familiar will same platform sharing field. Geographically also this move will make consolidated company more versatile against melt down in a particular country.  

Insurance Australia Group to buy Wesfarmers' Insurance underwriting business

Sydney based, Insurance Australia Group Limited (IAG) has announced the acquisition of Wesfarmers Limited insurance underwriting business for $1.653 billion (A$ 1.85 billion).  Post transaction IAG will become Australia's largest insurer.

Wesfarmers Limited is one of Australia's largest retailers.  Wesfarmers is largest private employer in Australia.  Wesfarmers Insurance is division of Wesfarmers Limited.  The company operates a general insurance underwriting business in the rural, small and medium enterprises and commercial sector.

Insurance Australia Group is a Sydney based multinational insurance giant.  IAG has business operations in Australia and New Zealand and growing presence in Asia.  IAS has business dating back from 1925.  The company is seeking to grow its Australian and Asian operations after selling its UK business last year.

The deal is priced at $1.653  billion.  With this transactional deal Westfarmers will record a pre-tax profit of $670 million.  Moreover company expects to raise $1.072 billion through share sale, to fund the deal.  Post this deal Westfarmers  will have a market share of 27% as compared to current top grosser SunCorp Group Ltd.'s 22%.

Wesfarmers' Insurance return on capital invested was 6.5% over five year period till 2013.  Same was way lower than weighted average cost of capital which was 11.5% for same period.  The deal is a result of this low return venture. 

Sompo Japan Insurance to buy Canopius group

Japanese leading property insurer, Sompo Japan has announced the possible acquisition of Lloyd's of London based insurance and reinsurance group, Canopius.  Deal can be priced at $970 million (100 billion yen) and is expected to be announced with-in a week's time.

Canopius group is Lloyd's of London based privately owned insurance and re-insurance group.  The company underwrites a diversified portfolio of business.  It has gone through series of acquisition following a strategy of organic growth in past nine years.  Canopius operates through Europe, United States, Singapore and Australia.  Company has financial resources more than £500 million.  Canopius has 84% ownership of Bregal Capital LLP.

 Sompo Japan Insurance Inc. is Japanese insurance company and is second largest property insurance company in Japan.  Even Sompo has meaning "property insurance".  Sompo has offices and subsidiaries in 28 countries offering insurance and risk management services.  Sompo Japan is a unit of NKSJ Holdings.  

As of now deal is not finalized.  But as per industry associates, deal can be announced finally with-in a span of week.  Same can be priced at about $970 million.  

In recent years Japanese insurance groups have been trying hard with both organic and green ways to strengthen their base outside Japan.  This is because Japan insurance market is almost stabilized and saturated with ageing population posing challenges towards increasing revenues.   

Avago Technologies to buy LSI Corporation for $6.6 billion

Singapore based Avago Technologies Limited has announced the acquisition of California based LSI Corporation.  The deal value of $6.6 billion ,which Avago is planning to pay in cash.  This is equivalent to $11.15 per share, which is 41% premium to Friday's closing price of LSI Corporation on NASDAQ.

LSI Corporation was founded under name of LSI logic in 1981 as a semiconductor company.  As of now LSI designs and develops semiconductors and software that accelerate the storage in data centre and mobile networks.  

Avago Technologies is leading designer and developer of analog and optoelectronics components and sub-system.  SilverLake bought Avago from KKR and took public with-in three years.  SilverLake sold the holding last year but retained one board seat.  This deal is called SilverLake's best deal ever, generating return of over five times the initial investment.  

Under terms of the deal, Avago will pay $11.15 per share.  Moreover SilverLake will invest $1 billion as convertible notes.  These carries a coupon of 2% and conversion price of $48.04 per share.  This transaction is expected to strengthen and broaden Avago's product base.  Also it is expected to provide economies of scale to the company.