January 22, 2004 11:03 AM PST
Vignette snaps up document management firm
The takeover should help Vignette expand its portfolio of Web site content management and portal services by adding Tower's document and record management products. The company said it will pay $45 million in cash and hand over 29.8 million Vignette shares worth $80 million.
The Austin, Texas-based software company said it would be in better position to help its customers meet legal requirements, such as those under the Sarbanes-Oxley Act, following its merger with Boston-based Tower. It expects to mesh its Web content, information management and other applications with services such as management of documents, records and reports.
"With Tower Technology, Vignette will be uniquely positioned to address the content lifecycle needs of the market including content creation, management, publication, analysis and retention with a strong focus on compliance," Vignette CEO Thomas E. Hogan said in a statement. "The enterprise document and records management segment is a proven, rapidly growing market, and with the completion of the acquisition of Tower Technology, Vignette will be the best-positioned company to take advantage of the opportunity."
Tower's products include a Web-enabled document processing system and a records management tool that helps in compliance initiatives.
Document management has emerged as a major activity in enterprises in the government, financial, pharmaceutical and chemical sectors, as well as in other regulated industries that handle large amounts of information.
This represents a business opportunity for services companies. According to research by the Meta Group quoted by Vignette, the enterprise content management market will be worth $9 billion by 2007. Last month, IBM took over a document software company, Green Pasture, to beef up its business in this sector. EMC also bought up content management software maker Documentum.
Vignette has previously bought software makers Epicentric and Intraspect Software and acquired the software assets of defunct company Revenio, calling them "strategic and architecturally synergistic acquisitions". These deals have allowed Vignette to offer a portfolio of enterprise content management services, according to the company.