A software company led by Irishman Dr Mike Lynch has paid US$775m to buy out rival e-discovery player Interwoven in cash.
The deal will involve aggregate consideration of approximately US$775m, a new revolving credit facility from Barclays and a portion of Interwoven and Autonomy’s cash reserves. Post-closing Autonomy expects to have a cash balance of at least US$75m at the end of the second quarter.
The acquisition will strengthen Autonomy’s access to the worldwide legal and compliance industry through Interwoven’s significant sales force with industry expertise.
Both companies expect to achieve synergies of approximately US$40m per annum over the first year from completion, from a combination of duplicative general and administrative, marketing programmes and other redundant costs.
“The combination will extend Autonomy’s legal and regulatory usage by top-end customers and regulators and the e-discovery marketplace into the practices of the world’s leading law firms, creating a larger combined market and a continuous chain through the entire litigation and risk management process,” the company said in a statement.
“The market need for this solution for law firms has been driven by regulatory changes such as the US Federal Rules of Civil Procedure, which means much larger volumes of content have to be processed between the chain of the client and the law firm.
“The acquisition also allows us to extend Autonomy’s value chain of discovery, review, processing, early case assessment, linking those to the operations within the law firms. The combination creates the largest company dedicated to the legal information management industry with over 20,000 customers including 1,200 top law firms,” Autonomy said.
Lynch started his UK-based Autonomy with a stg£2,000 loan and turned into a US$250m-a-year software giant.
In 2007, Autonomy acquired Belfast-based enterprise software company Meridio for US$40.8m.
By John Kennedy