The rumour doing the rounds is that British search and content management maven Autonomy could be about to announce the acquisition of content management rival Open Text. The move would follow Autonomy’s acquisition of another ECM player, Interwoven, for $775m back in February 2009.
An Autonomy spokesperson came back to us with a line that said that there is nothing to announce at this time, while another of our sources has suggested that if a major deal like this is on the cards — and that is still an ‘if’ — then it is more likely to happen nearer to Autumn.
Autonomy raised around $1bn in a rights issue in February this year, which most expected it to spend on another US acquisition (Open Text is headquartered in Canada, however). That rights issue wouldn’t cover Open Text’s $2.3bn market cap, but then of course Autonomy could bolster its cash with a share swap.
The obvious questions that will be asked if such a deal happens is why the deal makes sense considering the overlaps between Interwoven and Open Text, why Autonomy appears to be buying market share rather than technology (unless it rejects the overlaps argument anyway) and whether it is a sign that Autonomy’s organic growth is faltering. Some analysts expressed disappointment at recent Autonomy results that organic growth was not what they had anticipated.
But then, with record H1 2010 six month revenues of $415.3m (within the range of analyst expectations of $412-417m), up 28% from H1 2009, and organic growth at 14%, the analysts could be accused of a certain lack of empathy about the economic climate right now, perhaps?