Persistent Systems buys US-based Starfish for $20.7 million

Indian information technology (IT) services firm Persistent Systems Ltd has acquired US-based advanced communications tools provider Starfish Associates for $20.7 million, the mid-tier company said this week.

The acquisition enhances Persistent’s engineering skills in contact centers and unified communications, while boosting its artificial intelligence (AI)-driven business transformation abilities, the company said.

Shares of Persistent Systems rose 3% in intraday trading to ₹4,734.95 on BSE at 1pm on Thursday, while the broader Sensex index increased by 222.25 points, or 0.28%, to 80,209.24.

Under the purchase deal, Persistent will make an upfront payment of $15.4 million to shareholders, subject to customary adjustments for working capital, debt and cash on closing.   Sellers will be eligible for a maximum cumulative earnout of $5.1 million over the next two years, contingent on achievement of certain performance thresholds. Some key employees will also be eligible for an aggregate amount of $200,000 over the next two years, contingent on employment continuity, it added.

“Our journey of industry-leading growth continues, fueled by strategic expansion and a deep understanding of our clients’ needs. 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,” Sandeep Kalra, chief executive officer and executive director of Persistent, said, adding that the acquisition “paves the way for us to support our global clients in unlocking the full potential of these innovations in their contact centers.”

Founded in 2005 and headquartered in Bridgewater, New Jersey, Starfish has built an automation platform that helps enterprises streamline the management of communication systems. It helps enterprises with
automated provisioning, self-service, resource management, and migration tools.

“Since our inception, Starfish Associates has been dedicated to enhancing enterprise management of unified communications and contact centers, always aiming to elevate customer and team member experiences,” Robert Hankin, co-founder and partner of Starfish Associates, said, adding that joining Persistent presents a new chapter for Starfish, “augmenting our integration, automation, and AI-driven contact center transformation capabilities and giving us access to Persistent’s solid customer base.”

Starfish enables multi-vendor communication management through automation with Amazon Connect, Avaya, Cisco, Genesys, and Microsoft Teams. In addition, it integrates with critical business applications like ServiceNow, Workday, and Microsoft Active Directory to streamline workflows and operations.

David Raanan, co-founder and partner at Starfish Associates, said, “Persistent brings unmatched expertise in digital engineering and AI automation. Our platforms and solutions align perfectly with Persistent’s strategic objectives, creating robust synergies to propel competitive advantages and streamline global enterprise operations.”

Persistent’s industry-leading growth and distinct culture make this an exciting proposition to watch as the need for an AI-enabled transformation from enterprises demands trusted providers with multi-platform experience in unified communications and contact centers to drive both enhanced customer experiences and operational efficiencies,” Phil Fersht, CEO and chief analyst of HFS Research, said.

“The synergies between Persistent and Starfish Associates bring immediate benefits to Persistent’s clients and position the firm aggressively in the customer experience market, further highlighting its broad-based AI capabilities,” Fersht added.