Documentum books eRoom

Expects to hit profit targets in Q3

  • alert
  • submit to reddit

Maximizing your infrastructure through virtualization

ComputerWire: IT Industry Intelligence

Documentum Inc, the document management turned enterprise content management (ECM) provider is to buy eRoom Technology Inc to bolster the collaborative capabilities of its expanding product suite.

David Milam, chief marketing office of Pleasanton, California based Documentum said that it had agreed terms late yesterday "to acquire privately-held eRoom in a combined stock and cash transaction valued at around $120m (based on current stock values)".

Specifically, Documentum will issue approximately 7.7 million shares, which fell in price 10% to $11.35 on Nasdaq on Thursday, and $12.6m in cash. Additionally, it said it will reserve 1.7 million shares to cover eRoom stock options that it will assume in the acquisition. Milam expects the deal to close in December.

Documentum will retain its name, but will continue to leverage the strong eRoom brand. Based in Cambridge, Massachusetts, eRoom employs about 195 employees. But despite its relatively small size, the company has quickly garnered over 1,000 customers. The company claims profitability and ComputerWire estimates revenue around the $9m mark.

Both companies had already established a close partnership. In response to increased customer demand, Documentum claims that eRoom was already building integration with its extended enterprise collaboration software into its ECM suite.

Early indications of a possible merger can be traced back to July 2002, when Documentum announced that it planned to launch a new product - called Documentum Collaboration Edition - with "ad hoc collaboration features" that would allow teams of workers to come together in chat rooms, virtual white boards and other temporary settings and then store and index any content they create for later use.

The merger announcement will accelerate this product's time to market considerably, possibly in the next few months, according to Documentum officials.

Commenting on the prospect of a combined corporate entity and integrated collaborative ECM offering, Dave DeWalt, Documentum's president and CEO said: "I believe eRoom's culture, attitude, and market position are very similar to Documentum's... I think this will make Documentum a very difficult vendor to beat in the marketplace and joining forces will expand our customer base and sales force and provides opportunities for cross-selling to both sets of customers".

Jeffrey Beir, eRoom's president and CEO was equally upbeat stating that "eRoom and Documentum will offer our target markets a compelling combination of collaboration and content management, a requirement we are hearing consistently from customers and prospects".

Significantly, the announcement will put increased pressure on rival content management players, such as Vignette, Stellent, Interwoven and FileNet, to revisit their own collaborative strategies. ComputerWire expects increased merger and acquisition activities from these players in the future; already vendors such as Stellent have been fleshing out their ECM suites with technology buys.

In a parallel announcement, Documentum also said that it earnings for its third fiscal quarter would be at the high-end of its forecasts. The company anticipates that it will announce positive earnings per share, between $0.03 to 0.04 for the quarter; which is at higher end of our prior guidance of $0.02 to 0.04. Revenues are now likely to be in the range of $55m - $56m, compared to an earlier forecast of $54.5m.

© ComputerWire

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
Disaster Recovery upstart joins DR 'as a service' gang
Quorum joins the aaS crowd with DRaaS offering
prev story


Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.