Verint and Witness Systems Will Combine to Deliver New Vision for the Customer-Centric Enterprise

Business Wire, Feb 12, 2007

Convergence of Workforce Optimization and Actionable Intelligence Visions Will Deliver Innovative Solutions to Enhance Contact Center and Enterprise Performance

MELVILLE, N.Y. & ATLANTA -- Verint Systems Inc. (VRNT.PK), a leading provider of analytic software-based solutions for security and business intelligence, and Witness Systems, Inc. (NASDAQ: WITS), a leading provider of workforce optimization software and services, today announced that they have entered into a definitive agreement under which Verint will acquire Witness for $27.50 per share in cash. The convergence of Witness' workforce optimization and Verint's actionable intelligence will create a broad portfolio of contact center and enterprise performance solutions, delivering a compelling new vision for the customer-centric enterprise.

The combined Verint/Witness portfolio includes solutions for quality monitoring, IP recording, multimedia interaction capture, speech and data analytics, performance management, contact center and enterprise workforce management, eLearning and eCoaching, customer feedback management, and a full range of strategic professional and consulting services. This powerful combination will enable small- to mid-sized companies and large organizations to leverage customer intelligence for better business decisions and optimize workforce, contact center and enterprise performance to deliver a compelling customer service advantage.

"Verint and Witness share a similar culture with a passion for growth, results-driven execution and a laser focus on customer success," said Dan Bodner, President and CEO of Verint Systems Inc. "This strategic move will create a platform for rapid organizational growth and provide a wealth of opportunity for our global employee population."

Together, Verint and Witness can create a foundation for growth that effectively addresses the most important needs of customer-centric enterprises, including innovative product development and world class delivery, service and support. Additionally, the Verint/Witness combination will provide a stronger global footprint, with offices around the globe, significant expansion of both direct, indirect and OEM sales channels, and create broad cross-sell opportunities across an extensive global customer base.

Said Nick Discombe, CEO of Witness Systems, "We are uniting a unique group of people and solutions through a converged vision and common purpose -- to help our joint customer base and partners enhance their operational effectiveness and create sustainable competitive advantage." Discombe continued, "This combination makes us an attractive strategic partner that delivers real solutions and strong ROI to both the SMB and enterprise markets."

"We are confident in our ability to effectively integrate the companies based on the strength of both management teams, our shared vision and our deep expertise in delivering value-added solutions for the enterprise market," concluded Dan Bodner. "This growth-driven combination advances our strategy to enhance customer and shareholder value."

Transaction Details

On a fully diluted basis, the total enterprise value of the transaction is approximately $950 million (which excludes Witness' cash). Verint expects to fund the transaction through a $650 million debt financing commitment provided by Lehman Brothers Inc., Deutsche Bank and Credit Suisse, a $293 million preferred stock investment by Comverse Technology, Inc (CMVT.PK), the 57 percent shareholder of Verint, and the remainder from existing cash of the combined company. In the transaction, Witness Systems shareholders will receive $27.50 per share, in cash, and holders of vested options will receive cash in an amount equal to $27.50 less the applicable exercise price of their options. Unvested options will be assumed by Verint and be exercisable for Verint stock.

The transaction is targeted to close in the second quarter of 2007, pending approval by regulators and by stockholders of Witness Systems, as well as satisfaction of other customary closing conditions.

Lehman Brothers Inc. acted as Verint Systems' financial advisor and provided a fairness opinion on the transaction to the Board of Directors of Verint Systems. Morgan Keegan & Company provided a fairness opinion to a committee of independent directors of Verint Systems with respect to the preferred stock investment by Comverse. Jones Day acted as legal advisor to Verint. Goldman, Sachs & Co. acted as financial advisor to Witness Systems and provided a fairness opinion on the transaction to the Board of Directors of Witness Systems. WilmerHale acted as legal advisor to Witness Systems.

Conference Call Details

Verint will be conducting a conference call to discuss the combination today, February 12, 2007, at 8:30 AM ET. An on-line, real-time Web cast of the conference call will be available on our website at www.verint.com. The conference call can also be accessed live via telephone at 706-634-7052. Please dial in 5-10 minutes prior to the scheduled start time. A replay of the conference call will be available on our website at www.verint.com until February 28, 2007.