Autonomy To Buy Interwoven

Autonomy on Thursday said it has agreed to buy Interwoven for $775 million in cash in a deal that would strengthen Autonomy's enterprise search and information management portfolio with the latter company's software for Web content and legal document management.

Under the agreement, Autonomy would pay $16.20 for each Interwoven share, a 36.8% premium over the closing share price on Jan. 21. The transaction is expected to close in the second quarter, pending approval by regulators and by shareholders of both companies.

The acquisition would create a combined customer base of more than 20,000 organizations, presenting a significant cross-selling opportunity for Autonomy, particular in the market for legal document management. Interwoven's customers include 1,200 of the world's top law firms and 21 of the Forbes Global 30 companies, according to Autonomy. Interwoven software powers 100,000 Websites, intranets and extranets.

Combining the two companies creates the "largest company dedicated to the legal information management industry," Autonomy said.

Demand for compliance software and document management has grown within businesses due to a surge in litigation and federal regulation. By adding Interwoven to Autonomy's portfolio, the latter company can offer software that allows businesses to further automate the organization, management and processing of human friendly information, such as text, forms, e-mails, voice and video, from disparate internal and external repositories.

"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," Mike Lynch, group chief executive of Autonomy, said in a statement.

Nevertheless, there is some overlap in the two companies' products, so customers will have to wait to see which technologies stay and which are replaced, and whether the migration will be smooth.

The deal is expected to boost Autonomy earnings by 20% in the first full quarter of the combined company.

Autonomy and Interwoven were listed this year by Intelligent Enterprise as among the "Companies To Watch" in information management in 2009.