Open Text makes $68.5 million bid for Accelio

Open Text Corp. on Monday announced its intention to acquire the outstanding shares of fellow document management company Accelio Corp. for $68.5 million.

The unsolicited takeover bid would see Open Text paying $2.75 per Accelio share. Accelio’s stock, which has lost about 90 per cent of its value since March, 2000, closed at $2.15 Friday on the TSE.

Ottawa-based Accelio (formerly Jetform Corp.) said it was informed of Open Text’s intention Friday, and would review the offer at a meeting Monday of its board of directors. The company also urged its shareholders to hold off any decision on the Open Text offer until the board puts forth its recommendation.

Waterloo, Ont.-based Open Text said some Accelio shareholders have accepted the takeover offer, and their shares combined with those controlled by Open Text total approximately 18 per cent of outstanding Accelio shares. Its offer will be conditional on acquiring at least two-thirds of Accelio’s outstanding shares.

When contacted, Open Text director of investor relations Greg Secord said the company had “no comments aside from the release” the company issued Monday morning. In the press release, Open Text said the combination of the two companies will result in greater market strength.

Garth Landers, a Gartner Inc. senior research analyst said Accelio’s e-form operations would be a valuable compliment to Open Text’s platform of collaborative commerce solutions.

“The document management world has always been one of suite offerings,” Landers said. “E-forms have traditionally been a standalone market. We have not seen anybody offer e-forms themselves as much as partner with someone like Accelio.

“It sweetens the pot and adds an inherent functionality the competition does not have,” he said of Open Text’s potential ability to offer e-forms capability. “Enterprises like to stay with one vendor.”

Landers said he also saw the offer as being attractive to Accelio, as it would make a more collaborative tool out of e-forms.

“E-forms have been pigeon-holed as something to automate pretty mundane things like travel forms,” Landers said.

However, Landers also noted the possibility of Accelio getting lost in the Open Text shuffle. He said Open Text has so for the most failed to make use of the imaging technology of Bluebird Systems, which Open Text acquired in Oct. 2000.

“It would be a case of Open Text not really focusing on the product line,” Landers said of Bluebird. “This is a danger to Accelio.”

Open Text has had other problems with take-overs as well. In 1998, the company announced its interest in buying PC Docs International Group Inc. But Open Text was outbid by Hummingbird Communications Ltd. For its part, Open Text complained it was not privy to the confidential PC Docs information Hummingbird received.

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