Dan Bodner, CEO of Verint Systems Inc.

Dan Bodner, CEO of Verint Systems Inc. Credit: Newsday/Audrey C. Tiernan

Verint Systems Inc., Long Island's sixth-largest public company, has approved a plan to split its cyberintelligence and call-center businesses into two public companies.

Shares in the Melville company soared 6.9% to close Thursday at $51.09.

A Verint spokesman said in an email Thursday that the larger customer engagement business, which provides corporate call center, digital marketing and back office services, would continue to be based in Melville, but that the location of the cyberintelligence company's headquarters would be disclosed in the future.     

Wedbush Securities analyst Daniel Ives said in a research note that the company's "monumental move" follows pressure from investors. Ives said splitting the company will unlock shareholder value through the planned tax-free spinoff of the cyberintelligence business.

The deal will require final approval of Verint's board of directors and clearance from regulators and tax authorities in the United States and Israel.

As of Jan. 31, the company had about 6,100 employees and contractors, with about 41% in the Americas and 25% in Israel.

Verint's 49,000-square-foot headquarters in Melville houses executive management, finance, legal and human resources functions, its 133,000-square-foot Alpharetta, Georgia, facility is used for administration, marketing and product development and its 176,000-square-foot facility in Herzliya, Israel, provides space for manufacturing and research and development for the cyberintelligence business.

The corporate carve out is expected to be completed around February 2021.

Verint also announced a plan by Apax Partners, a London-based private equity fund, to take a stake in the company worth up to $400 million.

Verint chief executive Dan Bodner said that Apax will provide expertise in executing the carve-out of the cyberintelligence business and Verint's move toward providing clients with cloud services.

Cloud computing services let customers tap applications through the internet instead of installing the software on servers or mainframes in their own data centers.

In a conference call after the stock market close Wednesday, Bodner said separating the businesses will help the business units "achieve even better performance of the long term."

In an effort to give the units "more operational agility," Verint already has "substantially separated" the sales, services, marketing, product management and research and development segments of each business, he said.

Verint's call-center business serves major corporate clients, including Walmart, Merck, State Farm and Verizon. Its cyberintelligence business provides data-mining and security-threat analysis software used by law enforcement and intelligence agencies to fight crime and terrorism.

In 2018, Verint posted revenue of $1.2 billion, making it one of Long Island's largest public companies. After the market close Wednesday, Verint reported net income of $11.7 million on revenue of $324.9 million for the quarter ended Oct. 31. Cyberintelligence accounted for revenue of $106.9 million, while customer engagement accounted for $217.9 million.

In April, Manhattan asset manager Neuberger Berman Investment Advisors LLC launched a proxy challenge to unseat three incumbent Verint directors. As part of that challenge, which was called off in June, Neuberger Berman questioned whether there was synergy between Verint's two business lines.

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