Comverse Technology Inc., which controls a major stake in Melville video analytics firm Verint Systems Inc., will spin off a separate software unit later this year as part of a broader corporate restructuring, the Manhattan-based firm said Wednesday.
Comverse, a Nasdaq-listed holding company once entangled in a federal accounting scandal, will distribute shares of its wholly owned subsidiary Comverse Inc. to existing shareholders, creating a new publicly traded company focused on Comverse's voice messaging software.
The company will also seek to do away with its holding company structure in a bit of financial engineering that seeks to cut costs and add focus, a spokesman said.
"It eliminates what's essentially a multi-industry conglomerate structure and allows for more focused pure-play investing," said spokesman Paul Baker.
The U.S. Securities and Exchange Commission will review the restructuring plan, which also must be approved by the company's board and shareholders.
It's unclear how the restructuring will affect Comverse's 42 percent stake in Verint, a public company with $726.8 million in sales in its fiscal year ended January 2011.
Wedbush Securities analyst Scott Sutherland, who follows Comverse, said company management had indicated they intended to restructure the company. Sutherland said the move should cut costs by eliminating a separate management structure for the holding company and "set the table for potential M&A transactions."
Comverse is still working with Goldman Sachs to explore the "full range of strategic alternatives" for its businesses, said Baker, the company's spokesman. Another Comverse subsidiary, Starhome, provides wireless roaming software.
Long based in Woodbury, Comverse moved its offices to Manhattan in the wake of a scandal involving the backdating of stock options to boost executive pay.
In November 2010, Comverse co-founder and former chief executive Jacob "Kobi" Alexander agreed to pay $53.6 million to the federal government to settle charges related to his role in the ordeal. Alexander had taken haven in the southwestern African nation of Namibia in 2006.
Shares of Comverse's stock fell 4 percent, to close at $6.29 Wednesday.