Wednesday, August 23, 2006

Hit #111

IBM is continuing its buying spree, this time snapping up FileNet (FILE) by coughing up $1.6 billion! The all-cash deal values FileNet at around $35/share, a tiny premium over the most recent close, but a gain of around 93% over my average cost of around $18.18/share.

The small premium over the previous close was a surprise since FileNet should have found other buyers in the absence of IBM. Companies from Oracle to BEA would like to enter the document management space. EMC did so long time ago with its buy of Documentum (an early hit for me).

This buyout makes the last big player, OpenText (OTEX), a definite target, though for the moment OpenText itself is busy closing up its recent acquisition of HummingBird (HUMC) following a minor bidding battle.

The two smaller players left behind are Mobius (MOBI) and Stellent (STEL). Stellent will eventually be bought by BEA since they are already in a close partnership. Mobius has a partnership with IBM but that may be in jeopardy once the FileNet acquisition is completed.

Previous hit - Zomax (#110)


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