Autonomy buys Zantaz for £186 million

Source: Technology Digital

Date :03/07/2007 11:20:11

Software company Autonomy has announced the acquisition of Zantaz, a US electronic archive storage and retrieval service, for £186 million in cash.

The deal is part funded with an underwritten placing of 12.7 million shares and a term loan.

The Cambridge-based company also said it expected to report record second-quarter results, which would be “significantly ahead” of consensus estimates and above the top end of analysts’ forecasts.

Zantaz, which is based in Pleasanton, California, develops software for electronic archiving and includes nine of the top ten law firms as well as 14 of the top 20 financial securities companies among its customers.

Autonomy said the acquisition will increase earnings in the first six months following completion.

It added that the transaction, which is expected to be completed by August, would produce cost synergies of about $25 million per year and “add significant scale” to revenue and profitability.

Mike Lynch (pictured), group chief executive at Autonomy, said the acquisition would enable the company to better serve companies that are wanting to store large amounts of digital information, including e-mails and video.

“Companies are moving away from the old green screen databases to modern unstructured information storage,” he said.

Autonomy will also assume brought-forward tax losses of about $45 million at net present value.

Steve King, chief executive of Zantaz, will retain his position as head of the Zantaz division of the Autonomy group.

July 3 2007

Read our interview with Mike Lynch - http://webmail.execdigital.co.uk/newsarticle.aspx?articleid=688&type=16