In a move to strengthen its communication technology offerings, Indian IT company Persistent Systems (Persistent) announced today that it will acquire Starfish Associates, a U.S. software firm. The deal, valued at $20.7 million (approximately Rs 173 crore), will see Persistent acquire a 100% stake in Starfish Associates. This acquisition will allow Persistent to leverage Starfish Associates’ expertise and expand its existing capabilities in the field of Contact Center and Unified Communications.
The total cost of acquiring Starfish Associates is $20.7 million. Persistent will pay an upfront amount of $15.4 million (approximately Rs 130 crore) to the shareholders. This initial payment amount may be adjusted based on Starfish Associates’ financial situation at closing, such as their working capital, debt, and cash balance.
The agreement includes some performance-based incentives for the sellers. If Starfish Associates meets specific targets over the next two years, the sellers can earn an additional $5.1 million. Additionally, to encourage key employees to stay on board, Persistent has offered them a total retention bonus of $0.2 million over the next two years.
“Known for its cutting-edge Enterprise Communications automation platform, Starfish Associates caters to the world’s largest enterprises including many Fortune 500 companies. Starfish Associates’ automation platform excels as an intelligent integration hub and workflow engine, facilitating seamless connections across a myriad of business applications and communication systems,” Persistent said in a statement.
The acquisition will also improve Persistent communication management capabilities. Starfish Associates’ platform automates communication across various platforms, including popular ones like Amazon Connect, Avaya, Cisco, Genesys, and Microsoft Teams. This will allow Persistent to support clients better using a variety of communication tools. Furthermore, Starfish integrates with critical business applications like ServiceNow, Workday, and Microsoft Active Directory. This integration will streamline workflows and operations for Persistent clients.
The acquisition is expected to close within 4-6 weeks, subject to standard approval processes. Once finalized, Persistent Systems Inc., USA, will become the sole owner of Starfish Associates.
“The integration of Starfish Associates’ platform greatly enhances our unified communications and contact center management offerings as this industry undergoes significant disruption on the back of AI-led innovations. This acquisition paves the way for us to support our global clients to unlock the full potential of these innovations in their contact centers,” said Sandeep Kalra, chief executive officer and executive director of Persistent.
Starfish had LTM (last twelve months) revenue of $8.2 million as of March 31, 2024. In the previous two calendar years 2022 and 2023, it reported a revenue of $7 million each.
Founded in 2005 with headquarters in New Jersey, Starfish offers solutions in the Unified Communications and Contact Center ecosystem, building an automation platform to help enterprises streamline the management of communication systems. It allows enterprises with automated provisioning, self-service, resource management, and migration tools, the filing further said.
Robert Hankin, co-founder and partner of Starfish Associates, said, “Since our inception, Starfish Associates has been dedicated to enhancing enterprise management of unified communications and contact centers, always aiming to elevate customer and employee experiences. Joining forces with Persistent presents a new chapter for us, on one hand augmenting our capabilities in integration, automation, and AI-driven contact center transformation, and on the other hand, giving us access to Persistent’s strong customer base.”
Following the acquisition announcement on Wednesday morning, Persistent stock hit a 52-week high of 4,596 apiece, rising over 2% on the BSE.
