SoundHound AI said this week it has completed its acquisition of LivePerson, closing a deal first announced in April and folding LivePerson's enterprise messaging business into SoundHound's voice-focused AI platform.
The transaction, confirmed in a joint announcement from the companies, was structured at an equity value of roughly $43 million paid to LivePerson shareholders in a mix of SoundHound stock and cash, implying a total enterprise value near $250 million once LivePerson's debt is factored in. As part of the closing, SoundHound retired LivePerson's outstanding debt, leaving the combined company with a debt-free balance sheet. LivePerson shares stopped trading on the Nasdaq once the deal closed.
Combining voice AI with enterprise chat
SoundHound built its business on voice assistants for cars, restaurants and call centers and holds more than 750 patents in the space. LivePerson brings a digital-messaging platform used by a customer base that includes 25 of the Fortune 100. SoundHound plans to fold that customer base and messaging infrastructure into OASYS, its "Orchestrated Agent System," to offer a single platform spanning voice, web, mobile, SMS and social-media channels. The company said it is targeting more than $500 million in future revenue drawn from the existing combined customer base as cross-selling ramps up over coming quarters.
Together, we are delivering the most complete AI platform to the most comprehensive enterprise customer base in the industry.
Keyvan Mohajer, CEO, SoundHound AI
John Collins, who had served as LivePerson's chief financial officer, chief operating officer and interim chief executive at various points, was named CFO of the combined company. "My focus will be on driving seamless operational integration," Collins said, pointing to margin expansion and profitability as near-term priorities rather than aggressive new spending.
A rocky road to the close
The deal was not a straightforward one. LivePerson and SoundHound amended their merger agreement after the original April announcement, including a change to how shareholders holding LivePerson stock listed on the Tel Aviv Stock Exchange would be compensated, shifting that group from stock to cash consideration. LivePerson stockholders formally approved the amended deal on September 2, and the acquisition closed two days later.
For SoundHound, the deal marks its most significant acquisition to date as the company tries to move beyond point products for restaurants and cars into full enterprise customer-engagement contracts, competing more directly with larger conversational-AI and customer-service platforms. Functional integration of the two companies' products is described as already underway, with the first joint product rollouts expected in the coming quarters.