Battery Ventures to buy NICE security unit for $100 million

Shabtai named president of new standalone company, Battery eyes further acquisitions
Monday, August 3, 2015

BOSTON—Battery Ventures, a technology investment firm based here, announced today it will acquire the physical security business unit (PSBU) of NICE Systems for up to $100 million.

Jesse Feldman, general partner at Battery Ventures, told Security Systems News that Battery will use the PSBU as a platform for growth and it is interested in possibly acquiring access control capabilities and more analytics capabilities as well.

“We have a signed deal. We’re just waiting for regulatory approval; we expect the deal to close in 30- to 60 days,” Feldman said.

Battery will pay $85 million cash and up to an additional $15 million for the video surveillance and PSIM provider.

Battery intends to use the PSBU to create a standalone company based in the PSBU’s current headquarters in Paramus, N.J. It will have additional offices in London and Singapore, and an R&D center in Israel. Battery will rename the PSBU in coming weeks.

“At our core, Battery is a technology investor, we fundamentally believe in investing in the technology and we will continue to support all of the products that have been historically with the NICE PSBU, and we expect to add more product and accelerate new product development,” Feldman said.

Battery named Moti Shabtai, the current general manager of the PSBU, as group president of the new company. Adam Markin, an “executive-in-residence” at Battery will serve as chairman of the new company. The current team will stay intact.

Battery plans to continue to invest in the PSBU and expand into other market segments. In addition to possibly adding access control capabilities, Feldman said that Battery would consider acquiring analytics capabilities, video and otherwise.

Feldman said Battery was drawn to the PSBU’s “organic growth trajectory, particularly on the software side. In the past, [some providers] have overpromised on the video analytics sides and we think NICE is the exception to that rule,” he said.

NICE Systems, based in Ra’Anana, Israel, is divesting its physical security unit, but it will continue its other lines of business. There was speculation a couple of years ago that Verint would acquire NICE Systems. Here’s a story about that.

NICE's Bob Banarjee spoke at TechSec 2015 on an educational session called "Is PSIM ready for prime time?" Here is a report on the discussion that took place at TechSec entitled "PSIM, just another four-letter-word?"

Raymond James Security, Defense & Government Services Investment Banking team served as advisor to NICE Systems.