Genesys is acquiring Interactive Intelligence Group in a $1.4 billion deal that continues a run of consolidation in the contact-center software industry. The goal now is growth through additional size, the companies said in a statement:
As a larger entity with increased scale, Genesys is committed to accelerate innovation in the customer experience market, with more than $1.3 billion in revenue and annual R&D spend approaching $200 million. Both cloud and on-premise product portfolios will continue to be supported and offered to the marketplace, with significant R&D investment across the full product portfolio.
The acquisition is a good move for Genesys as the companies don't play in all of the same verticals and also have complementary product portfolios, says Constellation Research VP and principal analyst Dr. Natalie Petouhoff.
Interactive Intelligence has sold an on-premises contact center product and more recently added a cloud version with both multi- and single-tenant options. It also offers unified communcations technology as well as some niche products, including a platform for debt collectors.
Genesys has deeper workforce optimization capabilities than Interactive Intelligence, and is also known for its focus on "omnichannel journey management" tools for synchronizing and streamlining a customer's interactions with a company across multiple methods of contact.
Both companies have rolled out cloud versions in recent years, hoping to drive more business with midmarket customers who may not require or desire a platform with the most complex capabilities.
Genesys was spun out of telco Alcatel-Lucent in 2011 to private equity firm Permira for $1.5 billion. Last month it received a $900 million minority investment from Hellman & Friedman that placed its value at $3.8 billion.
While private equity firms have a reputation for cutting costs in companies they acquire, Genesys CEO Paul Segre pledged the combined entity will "significantly invest" in products across both portfolios. Together the companies will have 10,700 customers and 1,000 channel partners around the world.
The Interactive Intelligence deal comes a few months after Israeli analytics vendor Nice Systems bought inContact for $940 million.
And the biggest deal may be yet to come. Genesys's competitor Avaya has been seeking to unload its call-center business for $4 billion as it grapples with mounting debt, and Genesys has put in a bid, Reuters reported earlier this month.
If that deal comes to pass, the result would be a powerhouse standalone contact center vendor, given Avaya's vast global market penetration. However, it could only complicate post-acquisition R&D challenges, depending on how much Genesys decides to harmonize the overall product portfolio.
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