Cambridge-based enterprise search firm Autonomy has bought California-based CMS group Interwoven for around $775 million (£563 million) in cash. The deal, which is subject to shareholder approval, would give the two companies a combined base of 20,000 customers. The lack of credit that hampered M&A deals in 2008 doesn’t appear to have been a problem here: the deal was eased through with the placing of ordinary shares, a new credit facility from Barclays and cash reserves from both parties.
Interwoven shareholders will receive $16.20 in cash for each of their shares. The acquisition, which officially goes through in Q209, will leave Autonomy with a cash balance of £75 million. Autonomy expects the deal to increase earnings by 20 percent in the first full quarter. It anticipates cost-savings too, $40 million in the full first year of the combined company from the elimination of duplicated operations. Interwoven, whose customers include BT (NYSE: BT), Virgin Media (NSDQ: VMED) and Microsoft (NSDQ: MSFT), reported revenues of roughly $70 million in Q4, while Autonomy posted net profits of $53.4 million on revenues of $145.3 million for the same period. Release.