In an aggressive move, ECM ISV Open Text has acquired Global 360. Global 360’s history is as a roll-up of document imaging and management software ISVs, but in recent years, it has moved its messaging more toward the higher growth BPM space. Open Text also has a history of rolling up distressed ISVs, although its last two acquisitions, Global 360 and Metastorm, have involved paying a premium for BPM-focused ISVs.
Open Text has paid $260 million for Global 360, which is almost three times Global’s reported annual run rate of $90 million. This is almost $80 million more than Open Text paid for Metastorm, which was a little smaller than Global 360.
Global 360 seems to fit nicely into Open Text’s portfolio for a couple reasons. First, Open Text clearly views BPM applications, like the case management apps that Global 360 touts, as a differentiator against SharePoint. (Check this story, starting on page 3 of our post-AIIM 2011 premium edition where VP of product marketing Lubor Ptacek discusses Open Text’s strategy for differentiating from SharePoint.) From the scuttlebutt I’ve heard, when an ECM platform is replaced by SharePoint, it’s most often Open Text’s Livelink, so this certainly seems like a valid concern for Open Text.
Second, Global 360 probably still produces a fair amount of revenue from the couple thousand maintenance contracts it had at last count, related to the half dozen or so imaging and document management ISVs it rolled up in the early 2000s. Having done quite a few acquisitions itself, Open Text certainly knows how to successfully manage this sort of business.
The acquisition announcement also seems to indicate that Open Text is restructuring its debt and securing some more financing for future acquisition. Could Open Text be trying to position itself for an acquisition by Microsoft?
According to the acquisition press release, “The major, case-based operations in large organizations are heavily dependent on content and process management, for example, loan processing, complaint management, claims processing and customer on-boarding. All of these solutions can benefit from dynamic case management, which more effectively combines content, processes and collaboration,” said Eugene Roman, Chief Technology Officer, Open Text. “Dynamic case management is the kind of technology customers are moving to and it ties together the strengths we’re building in our ECM and BPM portfolios.”
Definitely sounds like stuff that is at least complementary to SharePoint.