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Here’s Why Software Maker Nice Systems Made This Acquisition

May 18, 2016, 6:41 PM UTC
Do Not Call Forces Philadelphia Telemarketing Firm To Close
PHILADELPHIA - SEPTEMBER 26: Steve Lazaukas speaks to a customer during the last telemarketing shift at Spectrum Marketing Services, Inc. September 26, 2003 in Philadelphia, Pennsylvania. Spectrum Marketing Services, Inc., which had been in business since 1974, and as of January 2003 employed 125 people, was forced to close it's doors due to the Do Not Call Registry. (Photo by William Thomas Cain/Getty Images)
Photograph by William Thomas Cain—Getty Images

Israeli software provider Nice Systems is to buy U.S.-based inContact, a maker of cloud software for call centers, for about $940 million dollars.

Nice said on Wednesday it would pay $14 per share in cash and would finance the deal with cash on hand as well as debt of up to $475 million. Shares in inContact closed at $9.01 on Nasdaq on Tuesday.

Nice said the rationale for the purchase was to enhance customer service and offer what it described as a first fully integrated and complete cloud contact center where companies can interact with customers.

Chief executive Barak Eilam said the two companies were combining their contact center applications and analytics with cloud contact center technology.

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Nice expects to close the deal before the end of 2016 and expects the acquisition will be accretive to earnings on an adjusted basis in 2017.

Shares in Nice were up 1.3% at 250 shekels ($65.18) in Tel Aviv.

Guy Rosenschein, analyst at Israeli investment house Psagot, said Nice was using its cash to make a large strategic deal, which was very important for expanding its operations in the customer analytics sector.

The acquisition will help Nice, which currently focuses on very large financial companies, to expand into the mid-market and also expand its product range, he said.

Nice has been banking on analytical tools, which allow companies to delve into large amounts of data to spot fraud and fend off security threats, to deliver faster growth amid slowing sales growth of systems that help call centres and surveillance of buildings and transport networks.

The deal still needs regulatory approvals and inContact shareholders’ approval.