Genesys Dials Up $1.4B to Buy Interactive Intelligence in Call Centers
Call center software provider Genesys has ambitions to help businesses of all sizes connect with consumers in multiple ways. Now, that approach is poised for a boost through a deal for Genesys to buy out competitor Interactive Intelligence for $1.4 billion.
The agreement follows a month of speculation about the future of Indianapolis-based Interactive Intelligence (NASDAQ: ININ). In late July, news surfaced that the call center software firm was considering corporate moves that could include a sale of the company. The agreement announced Wednesday calls for Daly City, CA-based Genesys to pay Interactive Intelligence shareholders $60.50 in cash per share. That’s 6.7 percent higher than the Indiana company’s closing stock price on Tuesday, but the companies note that it’s a 36 percent premium to the stock price on July 28, before reports that Interactive Intelligence was seeking a deal.
Interactive Intelligence launched its first call center product three years after its founding in 1994. The company completed its initial public stock offering in 1999. In the years since, voice-only call centers have been evolving into “multichannel contact centers,” the company says in regulatory filings. This change is pushing software vendors to provide ways that businesses can connect with their customers on multiple channels—mobile apps, websites, live Web chats, and social media, in addition to the traditional voice contact through a call center. Last year, the company launched PureCloud, a suite of cloud-based services that can serve businesses of all sizes.
Interactive Intelligence says it distinguishes itself from competitors by offering flexibility and scalability through software that works on-site, in the cloud, or as a hybrid of the two. The company says its software is used by more than 6,000 customers worldwide serving companies of various sizes in finance, healthcare, and retail, among other sectors. Interactive Intelligence reported $390.8 million in revenue for 2015, up 14.5 percent from 2014. But the company also reported a net loss of $21.8 million.
For its part, Genesys was founded in 1990 and went public in 1997. The company was acquired by Alcatel in 1999 in a stock deal valued at $1.5 billion. Private equity firm Permira acquired Genesys in 2012. Genesys’s customer base of 4,700 is smaller than that of Interactive Intelligence, but it says its software targets “sophisticated needs” of call centers, which generates annual revenue topping $1.3 billion. Genesys says joining forces with the Indiana company will help it speed up efforts to serve customers of all sizes and on multiple channels. Genesys adds that the combined company will continue to invest in research, with annual R&D spending expected to approach $200 million.
Genesys says it is financing the acquisition with existing cash, as well as debt. The company announced last month a $900 million investment from private equity firm Hellman & Friedman for a minority stake in the company.
The deal still needs approval from Interactive Intelligence shareholders, but it is expected to close by the end of the year. Until then, the companies will continue operating independently.