Waterloo, Ont.-based Open Text Corp., provider of Livelink collaboration and content management software for the enterprise, announced on Wednesday that is prepared to acquire Gauss Interprise, a German-based Web content management software company.
The US$11-million deal, which is subject to the response of Gauss shareholders, is a good deal for both companies, said Tom Jenkins, chief executive officer of Open Text.
“It’s a good news story for customers of both companies,” Jenkins said during a conference call announcing the acquisition agreement. He explained that customers would see enhanced technology and product offerings in the future as a result of the acquisition.
“We believe the combo of two companies represents one of the most comprehensive enterprise content management systems available in the market today,” he said, adding that as the trend of consolidation in the software industry continues, customers are looking for integrated suites of products to manage their enterprise content.
As Gauss, with headquarters in both Hamburg, Germany and Irvine, Calif., becomes part of Open Text, both companies will gain increased critical mass in some of the key technologies that constitute enterprise content management, as well as an expanded customer install base, Jenkins added.
The Gauss office in Irvine provides Integrated Document and Output Management (IDOM) software for ERP systems – products that automate processes such as invoicing, and enable customers to convert paper into electronic documents via imaging technology. Offices in Hamburg mainly focus on Web Content Management (WCM).
Upon successful completion of the tender, Jenkins said Open Text plans to merge its own WCM and IDOM operations together with Gauss, in an effort to enhance the product and features of the technology for both customer bases.
Open Text said WCM solutions will offer customers a complete range of capabilities for corporate Web sites, intranets and extranets.
Worldwide, Gauss has about 1,100 customers, while Open Text has corporate deployments in 31 countries.
Open Text estimated the acquisition will add US$10 million, or US$0.02 per share, to its yearly profit. That would bring earnings to US$225 million or US$1.32 per share in the fiscal year ending in June 2004.
The deal is slated to close by the end of the year.