Vignette To Acquire Collaborator Intraspect

Enterprise Web application maker Vignette will buy real-time collaboration software and services provider Intraspect for $20 million in cash and stock.

The deal is still pending approval of Intraspect stockholders and closing conditions, and involves Vignette’s up-front cash purchase of $10 million and 4.2 million shares of privately-held Intraspect, which comes out to another $10 million.

Officials expect no problems garnering shareholder and board approval, and said a majority have already come out in favor of the acquisition. A California fairness hearing will be set up within the next 60 days to hear the case.

Ben Barnes, Intraspect president and CEO, said a “vast majority” of employees would keep their jobs in the coming acquisition, with only a few losses in redundant career areas. Since it was the very early stages of the deal, Barnes said they haven’t worked out specifics yet.

According to Thomas Hogan, Vignette president and CEO, the Intraspect acquisition would make it the only Java-based software suite incorporating collaboration, content management and the Web portal.

“Collaborative applications are a critical component in an organization’s drive to further exploit content and knowledge,” he said. “They are a key to improved overall performance, efficiency and productivity, and bring accelerated ROI to virtually all portal projects.”

Vignette already has a selection of collaboration tools in its enterprise arsenal, namely its Vignette Dialog and Vignette Messenger applications, thanks to its December, 2002, acquisition of Epicentric, and January, 2000, buyout of DataSage.

What the latest pending acquisition brings to the table, however, is Intraspect 5, a much more complete enterprise-wide collaboration application. Intraspect’s APIs cover most open standards and run on both Windows and Solaris, as well as an API that integrates e-mails SMTP.

“More and more organizations are turning to vendors that offer integrated content management, portals and collaboration to fulfill their vision of Smart Enterprise Suite,” said Gene Phifer, Gartner, vice president of research. “As industry consolidation continues, software vendors that can offer organizations an integrated set of best-of-breed applications such as content management, portals and collaboration are well positioned to meet and exceed customer demand and capture market share.”

What Intraspect brings, according to Barnes, is a much bigger product to the V7 suite than it currently possesses.

“(Vignette) has some fairly elementary products they use for collaboration,” he said. “While they are able to do some rudimentary collaboration, we bring a much more robust product to the table. There won’t be any of the architectural problems that you saw with the integration of other companies.”

While Vignette plans to eventually roll the Intraspect 5 application into its existing V7 content and portal applications, officials said they would still sell the Intraspect 5 as a stand-alone product.

More importantly, they said they would support existing Intraspect 5 customers, though for how long remains to be seen. Officials will likely lay out a road map for existing users at a Web cast scheduled Tuesday afternoon, conducted by the principals at Vignette and Intraspect.

“Intraspect’s current customer base has shown a clear need for strong collaboration, portal and content management from a single trusted vendor,” Barnes said. “We are delighted that Intraspect will find a strong and supportive home with a leader like Vignette, enabling us to continue to service our customer base on a significantly enhanced platform.”

“We’ll continue to sell, support and update our software for our customers,” Barnes said. “We have no plans not to offer it alone, it wouldn’t make sense.”

Intraspect has an impressive array of customers, from Bank of America and Barclays Global Investors to J.P. Morgan Chase and Reed Elsevier, as well as a joint iniative that started in August with BEA Systems to run its collaboration tool in the WebLogic 8.1 suite.

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