Analysts applaud Nice acquisitions of IEX, Performix
01.5.06 | 12:13 By Omri Cohen
Nice Systems (NASDAQ: NICE) is buying two companies, IEX of Texas and Performix of Massachusetts, for $213 million cash, and investment banks spent yesterday figuring out how the acquisitions will impact the Israeli company.
CIBC World Markets and Royal Bank of Canada, which both cover Nice, raised their 12-month price targets for Nice stock and repeated Outperform ratings. Another bank - Friedman Billings - upgraded Nice from Underperform to Market Perform and added a 12-month price target of $50.
The acquisitions sent Nice stock climbing 5.1% to a 5.5 year high of $54.80, well above Friedman Billings' target.
Nice, which makes voice, video and data recording and analysis systems for security applications, said the acquisitions are designed to bolster its leading status in the mk tfor recording solutions.
IEX supplies solutions for manpower management, strategic planning, and performance management at service centers. Nice is paying $200 million for it. Performix handles performance management systems at service centers and cost nice $13.2 million.
Nice expects the acquisitions to contribute between $28 million to $30 million revenues this year. It therefore raised its revenues forecast for 2006 to $395-$405 million.
CIBC raised its 12-month price target for nice from $60 to $68, which is the highest target so far, comprising a 24% upside even after the Saturday night surge.
The CIBC analysts say the acquisitions will expand Nice's basket of products far beyond that available at rival companies, such as Verint Systems (Nasdaq: VRNT) and Witness. It will become the only player able to offer a full, comprehensive package for recording and surveillance, voice analysis, manpower management and performance management, CIBC says.
Nice has made several acquisitions to date that round out its offering in recording technology, including through buying a division of Thales in 2002 and a division of Dictaphone in 2005. If it continues to shop, it will probably seek targets in public security, CIBC surmises.
RBC analyst Daniel Meron says he expects integration of the two new companies to go smoothly, based on Nice's previous experience with mergers. He also predicts that Nice will seek to buy somebody for its public security division.
Meron adds that last year IEX racked up $50 million sales and achieved positive Ebitda amounting to 40% of its turnover. He believes Performix sales were around $5 million. http://www.haaretz.com/hasen/spages/711636.html