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Comverse Technology, Inc. Holding Company Agrees To Be Acquired By Verint Systems Inc.; Transaction To Follow The Planned Spin-Off Of Comverse, Inc.

NEW YORK, Aug. 13, 2012 (GLOBE NEWSWIRE) -- Comverse Technology, Inc. ("CTI") (Nasdaq:CMVT) today announced that it has signed a definitive merger agreement with its majority-owned subsidiary Verint Systems Inc. (Nasdaq:VRNT). Under the terms of the agreement, following the completion of CTI's previously announced distribution to its shareholders of substantially all of its assets, including its wholly-owned subsidiary Comverse, Inc. ("CNS"), other than its holdings in Verint, Verint will acquire the CTI holding company, eliminating the current holding company structure. As of August 10, 2012, CTI currently holds approximately 41.0% of Verint's basic outstanding common shares and 100% of Verint's outstanding convertible preferred shares which, if converted, would result in CTI holding approximately 53.7% of Verint's basic outstanding common shares. 

Charles Burdick, Chairman and Chief Executive Officer of Comverse Technology, Inc. said, "We are delighted to reach an agreement that is in the best interests of the shareholders of both CTI and Verint. This agreement, along with the planned spin-off of CNS, will result in a tax efficient distribution to our shareholders and direct ownership in two independent, well-capitalized publicly-traded companies. In addition to eliminating the current inefficient holding company structure, CTI's elimination of the Verint convertible preferred stock will simplify Verint's capital structure and the distribution of Verint's shares directly to CTI's shareholders will significantly increase Verint's public float and liquidity for investors. Our spin-off of CNS remains on track for the end of October, and we expect the merger transaction to close in the first fiscal quarter ending April 30, 2013."

Financial Terms

Under the terms of the agreement, a newly formed wholly-owned subsidiary of Verint will acquire CTI, and Verint will issue to CTI's shareholders new Verint common shares in an amount equal to approximately 27.5 million Verint common shares (16.3 million common shares currently held by CTI and approximately 11.2 million common shares underlying the convertible preferred shares at the expected time of transaction closing) plus up to an additional $25 million ("Additional Shares") in Verint common shares (approximately 880,592 shares based on Verint's August 10, 2012 closing stock price of $28.39). The actual number of Additional Shares that will be issued by Verint will be based on the timing of the CNS distribution and will be calculated based on Verint's average stock price during a measurement period ending shortly prior to the closing of the merger. Based on Verint's current share price and CTI's current fully-diluted shares calculated under the treasury method, and assuming Verint's issuance of $25 million in Additional Shares, CTI's shareholders would receive approximately 0.13 shares of Verint common stock for each share of CTI owned.

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