The long hot summer of legal IT market buys and sells continues – this time in the DMS arena. Last week it was Hummingbird being bought by Open Text, today it is FileNet being bought by IBM. OK, so FileNet is no longer a big player in the legal sector – in the UK Slaughter & May is its last remaining site – but it is still a major player in the DMS world and in IBM's hands, who knows what will happen next.
IBM is spending US$1.6 billion on the acquisition of FileNet Corp in an all-cash deal that values FileNet at $35 a share, a slim premium to FileNet's $34.65 closing price on the Nasdaq Stock Market on Wednesday. If shareholders approve, the deal will close in the fourth quarter. California-based FileNet was founded in 1982 and says three-fourths of the Fortune 100 have been its customers. With 1700 employees and $422 million in 2005 revenue, FileNet is still a key presence in the enterprise content management market, which IBM expects to grow more than 10% annually over the next five years.