As HP Inc. continues its strategy of divesting of some assets following the split into two separate entities, OpenText Corp. continues to be the company that acquires some of those assets.
The Waterloo, Ont.-based company announced at the top of the week it had signed a definitive agreement to acquire the Customer Communications Management (CCM) products of HP Inc., including HP Exstream, HP Output Management, HP TeleForm and HP LiquidOffice for customer communications management, process automation and document delivery solutions.
In a news release, OpenText said it expects this acquisition to complement OpenText StreamServe, OpenText MediaManager, OpenText TeamSite, and OpenText MediaBin, and allow the company to better serve its customers by offering a wider set of CCM capabilities in areas, including authoring, workflow and composition for multichannel document presentment and interactive communications. In addition to the acquisition, the company announced they are exploring opportunities to work together in the future to broaden their software offerings.
The deal is worth approximately US$315 million, OpenText said in a news release, with the assets being acquired expected to generate between US$110 and US$125 million of annualized revenues, be immediately accretive to earnings and on the OpenText operating model by the end of first quarter of fiscal 2017, when the deal is expected to close, subject to the customary regulatory approvals and closing conditions. In an email, an OpenText spokesperson told IT World Canada that it is business as usual, and both companies and their respective business will continue to operate separately.
This isn’t the first time OpenText has snapped up HP assets. In April, it announced it had entered into a definitive agreement to acquire some of its customer experience software and services assets from HP Inc., including HP TeamSite, a modern multi-channel digital experience management platform for web content management, and HP Qfiniti, an intelligent workforce optimization solution designed to improve enterprise contact center management.
Late last year, OpenText debuted the latest version of its product suites its Enterprise World conference in Las Vegas as part of its Blue Carbon product development strategy, which included new versions of its product suites for both on-premises and SaaS users and incorporating new analytics functionality from its purchase of Actuate earlier in 2015.
In an email interview, IDC Canada analyst Mira Perry said the segments the research firm dubs “content management” and “customer experience management” are software markets where some vendors continue to see above average growth. “There continues to be a lot of opportunity for both niche players and for larger vendors with diverse portfolios.”
She said OpenText is already a very solid player in these markets with a broad portfolio of offerings as well as differentiating analytics capabilities, and adding more HP assets will help the company even further and enhance and differentiate their portfolio. “OpenText does a reasonably good job of integrating their acquisitions,” Perry said. “If they can do that with the HP technologies, it will be a benefit for new and existing customers.”
It will be important for OpenText to bringing the HP technologies into its core “Release 16” group of products with quick integration, she added. “If the products are left on the periphery it will be cause for concern.”
The HP products that OpenText is acquiring are generally well-regarded, said Perry. “HP’s decision to sell these technologies seems to be less about the market opportunity for these solutions and simply more about HP’s bigger strategy of bringing more focus to their core business competencies.” The products will provide OpenText with a diverse set of additional customers in both the public and private sector.
Perry said the big question for enterprise customers will be how OpenText collaborates with the channel partners who support the affected HP products and customers who use them. “Continuing a strong relationship with the channel will be critical to keeping customer satisfaction high,” she said. “These partners have bet their businesses on the HP technologies and their relationship with HP so a smooth transition for the partner community will go a long way toward keeping the customer base stable or growing.”