Originally appeared in MiFID Monitor
US-based EDM technology vendor Autonomy has agreed to buy legal document management system vendor Interwoven for US$775 million. According to Autonomy, the acquisition is aimed at strengthening its offering in the compliance technology sector.
The deal is expected to complete in the second quarter of this year and at that point, Interwoven shareholders will receive US$16.20 per share. The acquisition will enable Autonomy to extend its coverage from its current remit of electronic discovery, archiving and records management solutions to the legal and compliance sector.
Joe Cowan, Interwoven’s CEO, explains the driver behind the deal: “We believe customers will benefit from the combination of Autonomy’s industry leading technology with Interwoven’s unmatched position in our target markets.”
The EDM vendor, on the other hand, believes the combination will extend Autonomy’s legal and regulatory usage by top end customers and regulators. It also hopes that it will be able to extend its e-discovery marketplace into the practices of global law firms, creating a larger combined market. Autonomy expects to achieve synergies of around US$40 million a year by eliminating redundant administrative, marketing and other costs.
Given the intense regulatory scrutiny that is going on in the US market at the moment, it is unsurprising that vendors such as Autonomy are taking the decision to move into the compliance sector. IT budgets are being slashed across the board but regulatory compliance is one sector that is seeing an increase, as financial institutions attempt to mitigate risks and stave off regulatory fines.