Yext to acquire Hearsay Systems
Yext (NYSE: YEXT) has announced a definitive agreement to acquire Hearsay Systems for $125 million, with an additional $95 million contingent on performance targets. This acquisition aims to integrate Hearsay's digital client engagement solutions with Yext's digital presence management platform, creating a unified digital marketing platform for financial services. The combined platform will enhance customer engagement, compliance, and performance across various channels, including social media, websites, text, and voice. The transaction is expected to close in the second half of Yext's fiscal year 2025, ending January 31, 2025. This strategic move is poised to bring immediate value to regulated customers and expand the solution set to other industries.
- Acquisition of Hearsay Systems for $125 million, with an additional $95 million contingent on performance targets.
- Combination of technologies to create a unified digital marketing platform.
- Enhanced customer engagement, compliance, and performance across multiple channels.
- Potential for immediate value addition to regulated customers.
- Expansion opportunities into other industries beyond financial services.
- Integration with CRM systems like Salesforce to improve productivity and workflows.
- Hearsay Systems' compliance-driven platform supports 260,000 advisors and agents.
- The acquisition is contingent on regulatory approvals, which could delay the closing.
- The additional $95 million is conditional upon performance targets, introducing uncertainty.
- Potential integration challenges between Yext and Hearsay Systems' technologies.
Insights
Yext's acquisition of Hearsay Systems aligns with its strategy to expand its digital presence management capabilities. The acquisition, valued at
In the short term, the expenditure could put pressure on Yext's cash reserves or lead to increased debt, potentially affecting liquidity ratios. However, the upside lies in the potential revenue growth from an enhanced product offering, especially given Hearsay Systems' strong position in financial services.
Long-term benefits include increased market share and improved customer retention through a more comprehensive suite of services. Investors should monitor how well Yext integrates Hearsay Systems' technology and customer base, as well as the return on investment from the additional revenue streams generated.
Rating: 1 (Positive)
The acquisition brings together Yext's digital presence management platform with Hearsay Systems' compliance-driven client engagement solutions. Technology-wise, this merger is poised to offer a more integrated and powerful tool for managing customer interactions across multiple digital channels. For investors, it's important to recognize the value of combining these technologies.
Hearsay's expertise in regulatory compliance and its integration with CRM systems, especially Salesforce, enhances Yext's platform by adding robust compliance features and seamless CRM connectivity. This not only benefits current users in the financial services sector but also opens opportunities in other regulated industries.
The utilization of AI to optimize customer engagements is another key selling point. Investors should consider the potential competitive advantage Yext could gain by offering a platform that leverages consolidated analytics and AI-driven recommendations.
Rating: 1 (Positive)
From a market perspective, this acquisition positions Yext favorably in an increasingly consolidated digital marketing landscape. The trend towards integrated, all-in-one platforms reflects a demand for simplified, efficient marketing tools. Hearsay Systems' strong foothold in financial services and its compliance-driven solutions are significant assets.
Investors should note the potential for cross-industry applications of Hearsay’s technology, which Yext plans to leverage. This move could expand Yext’s addressable market, attracting clients from other regulated industries, thereby driving revenue growth.
Moreover, the strategic alliance with Salesforce, indicated by Hearsay’s previous investment, could facilitate deeper integration and offer a competitive edge in CRM-based digital marketing. This could enhance Yext’s market positioning and possibly lead to higher client acquisition and retention rates.
Rating: 1 (Positive)
Acquisition will enable Yext to provide a single digital marketing platform to power the customer journey from prospect to loyal customer
The acquisition will combine Yext’s industry-leading digital presence management platform with Hearsay Systems’ compliant engagement solutions across social media, websites, text, and voice. This strategic move will leverage the strengths of both companies' technology to provide a single digital marketing platform to power the customer journey and enable brands to convert prospects into loyal customers faster.
The world’s leading financial firms rely on Hearsay System’s compliance-driven platform to scale their reach, optimize customer engagements, grow their business, and deliver exceptional client service. Hearsay Systems helps 260,000 advisors and agents ensure all interactions meet regulatory and brand standards to reduce risk while providing a scalable way to manage customer engagement. Combined with Yext’s suite of products and AI technology, brands can access more channels in one platform, and leverage consolidated analytics and recommendations to improve performance across channels.
“Customers are increasingly looking to consolidate digital marketing channels into one platform to increase efficiency, improve performance, and reduce costs. Yext already provides access to more channels than any other provider. With Hearsay Systems, we’ll provide even more ways for brands to connect with their customers one-to-one,” said Michael Walrath, CEO and Chair of the Board at Yext. “Our combined technology will bring instant value to our regulated customers, and we see an opportunity to bring these solutions to other industries. Yext is focused on solving customer problems, and with Hearsay, we can bring the innovation they need faster.”
Hearsay Systems’ solutions integrate into CRM systems, including a strong alliance with Salesforce, whose venture capital arm invested in the company in 2020. With CRM integration, brands can synchronize contact information, track client interactions, improve field productivity, orchestrate workflows, and uncover best practices.
“Hearsay Systems has a long history of innovation for financial services, building transformational client engagement solutions and successfully bringing AI to a highly regulated industry. We are excited to provide an expanded solution set to our customers and introduce Hearsay solutions to customers across additional industries,” said Michael Boese, CEO of Hearsay Systems. “We've only just begun to see the opportunities for AI in digital marketing. By combining our resources and technology with Yext, we'll be able to deliver even more value to brands as they look to leverage the power of AI.”
Details Regarding Proposed Acquisition of Hearsay
The transaction is expected to close in the second half of Yext's fiscal year 2025, ending January 31, 2025, subject to the satisfaction of customary closing conditions, including required regulatory approvals. Wilson Sonsini Goodrich & Rosati, P.C. is serving as legal advisor to Yext, and Latham & Watkins LLP is serving as legal advisor to Hearsay Systems.
About Yext
Yext (NYSE: YEXT) is the leading digital presence platform for multi-location brands, with thousands of customers worldwide. With one central platform, brands can seamlessly deliver consistent, accurate, and engaging experiences and meaningfully connect with customers anywhere in the digital world. Yext’s AI and machine learning technology powers the knowledge behind every customer engagement, automates workflows at scale, and delivers actionable cross-channel insights that enable data-driven decisions. From SEO and websites to social media and reputation management, Yext enables brands to turn their digital presence into a differentiator. To learn more about Yext, visit Yext.com or find us on LinkedIn and X.
About Hearsay Systems
As the trusted global leader in digital client engagement for financial services, Hearsay Systems empowers over 260,000 advisors and agents to proactively guide and capture the last mile of digital communications in a compliant manner. The world’s leading financial firms—including BlackRock, Charles Schwab, and New York Life—rely on Hearsay’s compliance-driven platform to scale their reach, optimize sales engagements, grow their business and deliver exceptional client service. Hearsay is headquartered in
Forward-Looking Statements
This press release includes "forward-looking statements" including, without limitation, statements regarding Yext's expectations, beliefs, intentions, or strategies regarding the future, including the effects, benefits, and challenges of its pending acquisition of Hearsay Systems. You can identify forward-looking statements by the use of terminology such as “believe”, “expect”, “will”, “should,” “could”, “estimate”, “anticipate” or similar forward-looking terms. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: difficulties integrating the business and technology of Hearsay Systems, the risk that the benefits described in this release are not realized, and whether all offerings and capabilities discussed in this release will be available as and when stated in this release. All forward-looking statements are based on information available to Yext on the date hereof, and Yext assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
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Source: Yext, Inc.
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