Cognyte divests part of its threat intelligence analytics offering
HERZLIYA, Israel, October 19, 2022–(BUSINESS WIRE)–Cognite Software Ltd. (NASDAQ: CGNT) (the “Company”, “Cognyte”, “we”, “us” and “our”), today announced that it has entered into a definitive agreement to sell its situational intelligence solutions, which are part of of Cognyte’s Threat Intelligence Analytics offering, to Volaris Group (“Volaris”) for US$47.5 million plus a performance-based fee, if and to the extent earned. The transaction is expected to close in Cognyte’s fourth quarter, subject to customary closing conditions, including receipt of regulatory approvals.
Sharpen Cognyte’s Concentration
“Cognyte addresses many security use cases with forensic analytics software, including Threat Intelligence Analytics. The part of our Threat Intelligence Analytics offering that we cede focuses on physical security implementations that we call on our Situational Intelligence Solutions website, including the Symphia brand.Our strategy is to continue to address a wide range of security use cases that require sophisticated forensic analysis software. general environment of this year, we have decided to focus more on a reduced number of use cases in order to accelerate growth and improve margins, and we believe that we will benefit from a sharper focus”, said Elad Sharon, Chairman and CEO of Cognyte.
For the year ended January 31, 2022, excluding assets divested in all periods, our revenues would have been US$439.5 million, representing growth of 9.9% from year to year. During the first half of the current fiscal year, the assets sold represented approximately 10% of our total turnover. The assets transferred include products and intellectual property, customer contracts and employees.
Situational intelligence products help organizations guard against disruptions and attacks targeting their physical facilities and employees. Products are typically sold in the corporate, retail, healthcare, education, transportation, and public safety sectors and typically generate significantly smaller transaction sizes than other Cognyte solutions . Around 10% of our employees are expected to transfer with the company in the areas of R&D, Sales & Marketing, Operations & Services and G&A.
Mr. Sharon added, “We are confident that Volaris will provide an excellent home for our customers, partners and employees who will transfer as part of the divestiture.
“We are excited about the long-term opportunity of Cognyte’s situational intelligence solutions, and we look forward to welcoming transferring employees and customers to our growing Volaris community,” said Carl Bruce, Chief group at Volaris Group.
At closing, Cognyte will receive US$47.5 million in cash with a customary holdback to secure customary post-closing price adjustments and claims subject to release after the last of 180 days following closing and the settlement of customary price adjustments. In addition, Cognyte may receive earn outs in cash of up to approximately US$35.0 million, net of certain earn out expenses, subject to the divested assets achieving certain performance measures over three years. after closing. After the divestiture, except for certain transition services for a limited period, Cognyte will not be involved in the operation of the assets and the realization of the earn-out is not within the control of Cognyte. As such, at this time, we cannot be certain whether, and to what extent, any earnout will ultimately be earned..
Houlihan Lokey acted as financial advisor to Cognyte on this transaction.
About Cognite Software
Cognite Software Ltd. is a global leader in forensic analytics software that empowers governments and businesses with actionable insights for a safer world™. Our open software is designed to help governments and businesses speed up and improve the efficiency of investigations. Governments and businesses around the world trust our solutions to expedite and conduct investigations and gain insights to identify, neutralize and address threats to national security, personal safety, business continuity and various forms of criminal activity. Learn more at www.cognyte.com.
COGNYTE, ACTIONABLE INTELLIGENCE and ACTIONABLE INTELLIGENCE FOR A SAFER WORLD are trademarks of Cognyte Software or its affiliates. Cognyte Software and other parties may also own trademark rights in other terms used herein.
About Volaris Group
Volaris acquires, strengthens and develops vertical market technology companies. As an operating group of Constellation Software Inc., Volaris is focused on making businesses stronger in the markets they compete in and enabling them to grow – whether that growth comes through organic measures such as new initiatives and product development, day-to-day operations or through complementary acquisitions. Learn more at www.volarisgroup.com.
Caution Regarding Forward-Looking Statements
This current report on Form 6-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, including statements regarding the completion of the transactions described herein, are based on current expectations and assumptions that are subject to risks and uncertainties. The risks and uncertainties include, but are not limited to: satisfaction of the conditions to closing the transaction; the possibility that the transaction will not be completed on time or at all; and the effect of the announcement, expectation or completion of the transaction on customers, employees, suppliers, partners and results of operations. Words such as “estimate”, “believe”, “expect”, “anticipate”, “intend” and similar expressions may identify such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. See the section titled “Risk Factors” in Cognyte’s Annual Report on Form 20-F and our other SEC filings for a discussion of important factors that could cause actual results to differ materially from forward-looking statements.
See the source version on businesswire.com: https://www.businesswire.com/news/home/20221019005239/en/
Cogneyte Software Ltd.