IBM buys FileNet

IBM is acquiring FileNet, a provider of enterprise content management software, for about $1.6 billion, or $35 a share.

FileNet is the 20th acquisition of IBM’s Information on Demand initiative, which the company launched in February to expand its software and consulting units, according to a company statement.

The initiative is backed by about $1 billion in IBM research and development investments.

IBM said the goal of Information on Demand is to help customers make better use of all types of information -- regardless of format, platform or location -- to improve their business processes and respond quickly to market needs or new opportunities.

The company said it has aligned its software and consulting arms to aggressively pursue this emerging business opportunity, estimated to reach $69 billion by 2009.

The acquisition of FileNet, a company based in Costa Mesa, Calif., will expand IBM’s position in enterprise content management, a major component of Information on Demand.

Content management software systems such as FileNet’s capture, store, manage, integrate and deliver all forms of unstructured information, including images, audio, video, Web pages, Web logs, podcasts, radio frequency identification chips, documents and customer service reports, IBM said.

The company, based in Armonk, N.Y., said it believes this to be a hot growth area, with an estimated market opportunity this year of $3.9 billion and an estimated growth rate of more than 10 percent over the next five years.

“The combination of IBM and FileNet will deliver increased innovation and industry-focused content management solutions, enabling our clients, systems integrators, independent software vendors and other partners to create enhanced and more competitive solutions,” Lee Roberts, chairman and chief executive officer of FileNet, said in a statement. “At the same time, this transaction offers FileNet shareholders a solid premium over historical trading prices of our stock.”

About the Author

David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.

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