Market applauds Autonomy’s acquisition of Interwoven Inc for $775m
Autonomy Corporation plc, specialists in infrastructure software, will acquire Nasdaq-listed Interwoven Inc, a provider of content management software, for $775m.
The two companies have agreed on the takeover.
Autonomy CEO Mike Lynch said the combination of the two "industry leaders in Meaning Based Computing, and document and content management respectively, will continue the extension of Autonomy's IDOL as a key element of the regulatory, legal and compliance industries.
"Our past acquisitions have clearly demonstrated how Autonomy can quickly and effectively leverage the power of IDOL into new customer bases and to address new customer needs."
The acquisition will be funded by an underwritten placing of ordinary shares in Autonomy (amounting to about 10% of shares on issue), a new revolving credit facility from Barclays Bank and a portion of Interwoven and Autonomy's cash reserves.
After the deal is complete, Autonomy expects to have a cash balance of at least $75m.
The market warmed to the deal. Despite the share placement and the gain yesterday after the announcement of record results for FY2008, Autonomy's share price gained 4.5% to 1080p after the news. The Cambridge-HQed Group is now valued at £2.33billion. It is one of the few shares in the market trading near 52 week highs.
Dr Lynch, the University of Cambridge graduate who is the architect of the IDOL technology that has been driving Autonomy's dynamic organic growth, has also been demonstrating exceptional skills as a CEO.
He said: "We are very familiar with Interwoven, its product base and management team through our partnership and joint customers over the years and see this transaction as an exciting opportunity to extend the chain of Autonomy's solutions."
Interwoven's CEO Joe Cowan said that Interwoven and Autonomy were two high-performing companies that share the same vision improving the way organizations understand and interact with information.
"We believe customers will benefit from the combination of Autonomy's industry-leading technology with Interwoven's unmatched position in our target markets."
Interwoven, with headquarters in San Jose, was founded in 1995. It is especially strong in Legal Document Management. It has over 4,600 customers worldwide, including 1,200 of the top law firms, 9 of BusinessWeek's top 10 global brands, and 21 of the Forbes Global 30. It powers 100,000 websites, intranets and extranets.
In early January, Interwoven said it expected to report total revenues of $69.5m to $70.0m for the three months ended December.
Autonomy expects to achieve synergies of about $40m in the first year, from a combination of duplicated general and administrative, marketing programs and other redundant costs.
It said it expected the acquisition to be earnings enhancing in the first full quarter following completion; earnings accretion of about 20% in 2009.
