In a recent announcement, Ontario-based content management company OpenText said it is all set to acquire Guidance Software as a fully owned subsidiary for an overall price of $240 million in a deal that is expected to close by the third quarter of this year. The shareholders of Guidance will be paid $7.10 a share which would translate to a total value of $18 million, making the final price just around $222 million.
Guidance Software is a forensic security and eDiscovery vendor that has a customer base consisting 78 of the Fortune 100 companies. The acquisition will give OpenText a complete access to the forensic and eDiscovery tools along with the rich customer base of Guidance Software, though some overlapping functionality would also be included in the package. OpenText had already closed another high-profile deal with overlapping functionality last year when it acquired enterprise content management firm Documentum from EMC for $1.62 billion.
Cheryl McKinnon, analyst from a content management industry research firm, Forrester Researcher, said, “It certainly adds, with some overlap, to their eDiscovery and file analytics portfolio (i.e., those tools to clean up network drives, detect sensitive text inside documents, etc.). But OpenText has never had anything focused more on the forensic side of the discovery business. — that is, more security, deeper inspection of how information [has been] accessed, copied, etc. So that forensics side is net new for them,”
Several other analysts from the content management industry research firms expects OpenText to come up with more such acquisitions in coming months. The founder of one such firm Alan Pelz-Sharpe said, “I doubt it will be the last such acquisition by OpenText this year, indeed I expect to see more similar sized deals before year end.” On the deal with Guidance, he commented, “it’s about twice revenue, which is what you would expect on a deal like this one.”
