Open Text to acquire Vignette for US$310m

Peter Dinham
Thursday, 07 May 2009 08:57

IT Industry - Strategy

ECM vendor, Open Text, is to acquire Texas-based web software vendor, Vignette, in a $310 million deal which will see Vignette become a wholly owned subsidiary of Open Text.

Shareholders of both companies still have to approve the acquisition agreement, which, if approved, would see Vignette shareholders receive US$8.00 in cash plus 0.1447 of an Open Text common share for every Vignette common share which equates to approximately US$12.70 at close of market on 5 May.

The deal, if approved, represents a premium of approximately 74% above the 30 trading day average closing price of Vignette’s shares and approximately 41% above the most recent closing price, valuing the transaction at around US$310 million.

The two businesses will remain separate companies until approval of the deal by shareholders. The transaction is expected to close in the second half of this year, subject to shareholder and regulatory approvals.

Vignette president and CEO, Mike Aviles says that, after a “thorough evaluation of strategic and financial alternatives”, the company’s board of directors believed  that the deal with Open Text provided attractive value for its shareholders, and shareholders, customers, partners and employees would all benefit from Vignette combining with Open Text. 

John Shackleton, president and CEO of Open Text said the combination with Vignette would extend the breadth of Open Text’s offerings and further the company’s positioning as “the leading independent ECM vendor in the marketplace.”

“Vignette’s customers represent some of the world's most powerful online brands and we are excited about the opportunity to expand the relationship with these customers and partners,” said Shackleton.

According to Aviles, joining Open Text builds on Vignette’s “commitment to deliver the most innovative solutions for our customers and partners,” and, he added, “Vignette has an enviable customer base, deep expertise in web content management (WCM) and global distribution capabilities. Vignette customers will benefit from Open Text’s expanded ECM solutions portfolio as well as their Vignette products being supported by the world’s largest independent ECM solutions provider.”