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OpenText Continues Buying Binge With HP Document Output, Capture And Discovery Solutions

By - Source: Toms IT Pro
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Continuing its push to become the world's largest portfolio of enterprise information management (EIM) solutions, OpenText announced today that it will be acquiring business applications from HP Inc. for $315 million. The applications include the former Cardiff portfolio (HP TeleForm and HP LiquidOffice) along with HP Exstream and HP Output Management. This follows OpenText's acquisition of the former Interwoven Web Experience offerings just a couple of months ago, for $170 million (more on that here: OpenText To Acquire Distressed HP Engage Software Assets).

In its heyday, HP's TeleForm was a formidable competitor to Kofax (now owned by Lexmark) and Captiva (part of EMC's Enterprise Content division). But as the market for recognition slid and enterprises moved away from fax, the business eroded and TeleForm found itself as the lowest price commodity of the bunch. Under Verity, Autonomy and HP's stewardship, it never showed the revenue necessary to sustain itself as a standalone product, even with solutions around invoice capture, data extraction and intelligent routing.

LiquidOffice, on the other hand, was designed to be an enterprise-class business process management (BPM) solution from the get-go. But even with marquee customers like American Home Patient, Baird, Merrill Lynch and Ruby Tuesday, Cardiff couldn't compete with Lombardi (now part of IBM), Pega, Oracle and TIBCO.

Exstream Software, acquired by HP in 2008, is used for personalized, multi-channel creation and delivery of documents and communications materials. This paired nicely with HP's printing business, but was a misfit in the broader evolution of HP Inc. to its core of printers and personal computers. Even with a strong value proposition that promised "cutting up to 80 percent of document production costs and getting to market 85 percent faster," HP didn't have the people resources to properly manage its sales and support.

This is a much larger acquisition for OpenText since the prior deal with HP for TeamSite, MediaBin, Qfiniti, Explore, Aurasma and Optimost was valued at $170 million, or roughly two years of support and maintenance contracts. The acquisition announced today will be paired with another recent acquisition, the $163 million deal for Recommind announced in early June. It will be interesting to see if OpenText chooses to partner or compete against the former HP iManage (now independent) in the eDiscovery and information analytics market. With Hummingbird under its umbrella, OpenText most likely will go at it alone.

According to OpenText, this is a longer-term return than the earlier purchases. These solutions are expected to generate between $110-$125 million of annual revenues, with a three-year return on investment. HP's products are immediately accretive to earnings and will be integrated in the OpenText operating model by the end of first quarter fiscal 2017.

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