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Autonomy to acquire Interwoven

The following statement has just been released… Interwoven Inc has announced that it has entered into a
definitive agreement to be acquired by Autonomy Corporation plc for $16.20 in
cash per share for a total transaction value of approximately $775
million.

Interwoven’s products improve human interactions with information,
and Autonomy’s technology will allow people to know what those human
interactions mean. The combination of these two companies will redefine
how global 2000 corporations, leading law firms, and government
regulators will discover, analyze, and manage human friendly
information.

“Interwoven and Autonomy are two high-performing companies that
share the same vision for improving the way organizations understand
and interact with information,” said Joe Cowan, Interwoven CEO. “We
believe customers will benefit from the combination of Autonomy’s
industry-leading technology with Interwoven’s unmatched position in our
target markets. We are extremely excited with the unique possibilities
for future product direction that will arise through the integration
with Autonomy’s technology.”

“The combination of Autonomy and Interwoven, industry leaders in
meaning-based computing and document and content management
respectively, will continue the extension of Autonomy’s Intelligent
Data Operating Layer (IDOL) – an information infrastructure that global
2000 companies standardize on to search and process over 1,000 data
types,” said Dr. Mike Lynch, Group CEO of Autonomy. “Our past
acquisitions have clearly demonstrated how Autonomy can quickly and
effectively leverage the power of IDOL into new customer bases and to
address new customer needs, and we see great opportunities for
continued innovation and development of the Interwoven product
offerings. We are very familiar with Interwoven, its product base and
management team through our joint customers and partnerships over the
years and see this transaction as an exciting opportunity to extend the
chain of Autonomy’s solutions.”

Under the terms of the agreement, Interwoven will be acquired by
Autonomy for $16.20 per share, in cash, or approximately $775 million
in the aggregate. The directors and certain executive officers of
Autonomy and Interwoven have agreed to vote the shares they own in
favor of the acquisition. The transaction is expected to close by Q2
2009 and is subject to shareholder approval by both companies,
Hart-Scott-Rodino antitrust clearance, and other closing conditions.

…Guess this also explains why Interwoven recently cancelled its annual user conference.

15 replies on “Autonomy to acquire Interwoven”

I bet the Interwoven sales force get slaughtered. Autonomy is a real “ready, fire, aim” swashbuckler.

Importantly this makes Interwoven enemy #1 to Microsoft because IDOL is the major competitor to MS FAST

The big issue here for many firms is whether its now worth going with Interwoven Universal Search as that's surely for the chop when Autonomy takeover.

Or a strategic win because you get a free upgrade to the superior (and considerably more expensive) Autonomy search.

And on the Litigation Support front, Discovery Mining might be feeling a little bit vulnerable when pitted against IntroSpect. There had been some hints about rebuilding DM around Interwoven's Universal Search, in much the same way that IntroSpect has been re-built around the IDOL engine, but why bother now? Good to see a UK firm competing on the world (US dominated) stage though.

Hardly likely… they didn't do that with verity.
It'll be full price or nothing.

We're hearing that existing Interwoven search customers (on the Vervisimo engine) will be offered a free swap out to Autonomy IDOL. In the meantime here is a comment we've been forwarded…
“Autonomy believes:
– The combination of Autonomy's Meaning Based Computing technologies (IDOL) (with its ability to understand content) with Interwoven's suite of products (focussed on managing the interactions of people and content) will create a new set of technologies, updating and enhancing Interwoven's products by significantly reducing the levels of manual effort now required. These technologies are ready to address the new need for manage-in-place and extend Autonomy's reach into a new customer base. Interwoven's products know what the customer interactions are, and Autonomy's IDOL will allow them to know what they mean. Examples of this in action will include:
– Combination will extend Autonomy's legal and regulatory usage by top-end customers and regulators and the ediscovery marketplace into the practices of the world's leading law firms, creating a larger combined market and a continuous chain through the entire litigation and risk management process. The market need for this solution for law firms has been driven by regulatory changes such as the U.S. Federal Rules of Civil Procedure, which means much larger volumes of content have to be processed between the chain of the client and the law firm. The Acquisition also allows us to extend Autonomy's value chain of discovery, review, processing, early case assessment, linking those to the operations within the law firms.
The combination creates the largest company dedicated to the legal information management industry with over 20,000 customers including 1200 top law firms.”

It must be about time for Open Text to make another pickup…

Autonomy is renowned for being a very difficult company to work for. Those that manage to avoid the inevitable redundancies might wish they hadn't.

It's been suggested we should start a sweepstake on who will be the next legal IT vendor to be acquired – and who will be the next buyer to show their hand in the market.

Microsoft or SAP to acquire Open Text …not as unlikely as you may think.

Here's another comment, just in from Recommind, true he's not exactly impartial…
“It will be a very interesting two to three quarters following Autonomy’s agreement to buy Interwoven last week. Questions abound about the reaction from Interwoven’s existing customers to this news; it’s quite likely that many, if not all, will be left in limbo as the deal is finalised and the 18 to 24 month integration process begins.
“Some of the challenges will be the same faced during any acquisition, including pricing normalisation – with Interwoven pricing likely to rise dramatically, retention of key personnel – not an Autonomy forte, and the integration of corporate cultures.
“However, what complicates this situation further is the relationship between Interwoven and its former key partner, Vivisimo – which Interwoven had previously selected over Autonomy – to supply enterprise search technology to its customers. With this partnership no doubt being terminated once the acquisition goes through, how Autonomy and Interwoven will ease the pain for their customers remains to be seen – and, if the added upheaval, expense and time required to replace Vivisimo with Autonomy will do the trick.
“Customers today cannot be expected to hang in limbo for another two years until the deal goes through and the integration is complete. With information reserves continuing to expand dramatically, information management and enterprise search are no longer a nice to have, but a necessity. Put another way, customers don’t have the luxury of standing still while this integration is finalised – notwithstanding the prospect of higher prices, diminished customer support and a radically changed corporate culture. In fact, Interwoven’s existing customer base may already have begun seriously reassessing their options.”

Charles, a couple of comments:
I believe we can use the Autonomy acquisition of Meridio as a template of what will happen here:
There will be an all hands on deck project to get IDOL as the imbedded search engine. This eliminated inbound license costs, but wont't add any features to the product (unless you consider IDOL better in a basic keyword search)
There will be an extereme culture clash in the sales and consulting operations. At Meridio, 100% of the US staff left. Lots of the best people in EMEA. Good people, not the kind you want to lose. Relationship Sales people have no place at Autonomy.
Whilst Meridio has traction in several markets, Interwoven sales are based on Open Text defections. That is a terrible strategy when you have just put doubt in your own future.
What happens to the Interwoven roadmap as they port to Autonomy?
Will Autonomy treat the Interwoven installed base as a cash cow to milk then slaughter?
What will the Interwoven Microsoft Strategy be? (Microsoft has no love lots for Autonomy).
Watch out for FAST and SharePoint in the wake of this acquisition. Interwoven will stumble and FAST and SharePoint DM will gain a foothold because of it.

I don't think SAP or MSFT will acquire such a large ECM vendor specifically for the legal market or to enter the broader ECM market. OpenText recently acquired Hummingbird to get into the legal market.
I believe there is a bigger chance of companies like Documentum making a play in this market.

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