NICE Systems on Monday announced that it has entered into an agreement to sell its physical security business unit (PSBU) to Battery Ventures for a total consideration of up to $100 million. According to a statement, the deal consists of $85 million in cash and up to an additional $15 million based on future performance of the business unit, which provides video surveillance and situation management solutions to a broad range of organizations.
Battery Ventures said the unit will be spun out into an independently operating business. Additionally, the company said it plans to continue to grow PSBU by maintaining its focus on the physical-security market, while expanding the unit's solutions for daily operations management. Battery also hopes to complement the company's existing technology through highly strategic acquisitions.
"There are great opportunities to grow PSBU into a stronger and more influential player in the market by offering new solutions, targeting new market segments and serving a broader range of customers," said Jesse Feldman, general partner at Battery Ventures. "In conjunction with the PSBU management team, Battery's financial backing will help the new company capture those opportunities."
Moti Shabtai, the current general manager of PSBU at NICE Systems, will become group president of the newly created company. He will be joined by Adam Markin, an experienced industry operator and Battery executive-in-residence, who will serve as chairman.
"PSBU has been a visionary in this market for years, and we will continue the division's track record of innovation," Shabtai said. "Battery will strive to help PSBU achieve the company's potential as well as long-term business objectives, providing PSBU with access to additional capital, extensive transaction experience, and broader industry relationships to help accelerate growth."
The newly created company will be headquartered in New Jersey with additional offices in London and Singapore, and an R&D center in Israel. Battery's private equity practice, which has a global emphasis, has experience with operations in the United States, Europe, Israel and Asia.
For its part, NICE said that the divestiture will enable the company to focus on its key markets and enterprise software business as part of the execution of its long-term strategic plan.
“We continue to aggressively execute our long-term strategic plan,” said Barak Eilam, CEO of NICE. “An element of that plan has been the divestiture of two businesses that did not fall within the parameters of our more synergetic, primary businesses. With this agreement, we have completed this stage of our plan, and we are now better able to focus on those areas that we believe will continue to drive profitable growth for our company.”
Eilam continued: “The Physical Security business unit has been a source of pride for NICE for many years with its history of constant innovation and market leadership. We are pleased to reach this agreement with Battery Ventures, which will place great emphasis on this area of business, and will be a good home for our employees. I believe that this business will remain a valuable asset for both customers and partners.”
Subject to certain conditions and satisfaction of terms, the transaction is scheduled to close during the third quarter of 2015.
