UPDATE: Credit Suisse Reinstates Coverage on Verint Systems on Acquisition of KANA Software

In a report published Wednesday, Credit Suisse analyst Michael Nemeroff reinstated coverage on

with a Neutral rating and $49.00 price target, up from $40.00. In the report, Credit Suisse noted, “VRNT announced it has completed the acquisition of privately-held KANA Software, a provider of on-premise/cloud customer experience management solutions. VRNT paid $514M ($100M from existing cash and $414M of debt from an incremental term loan and revolving credit facilities), which represents 3.5x C2014 revenue, or ~12.0x EBITDA. We forecast the transaction will be accretive to F2015 results (CS estimates $0.29). Management believes the acquisition is highly strategic and that KANA's customer service modules will enhance VRNT's product offerings and allow the combined company to offer new/existing customers a holistic suite strategy, from a single vendor, to transform customer engagement across multiple channels. Based on the expected revenue and non-GAAP EBITDA contributions from KANA ($140-150M and $40-45M, respectively for C2014), we increase our F2015 revenue/EPS estimates to $1,116M/$3.30 from $982M/ $3.01 with a new $49 TP.” Verint Systems closed on Tuesday at $44.14.