OpenText (USA) (NASDAQ:OTEX) has announced its plans to purchase the Guidance Software, Inc. (NASDAQ:GUID), the company that makes the forensic software for close to $222 million. The Guidance software is recognized for its digital invention and its endpoint information on security outcomes. The Ontario-based company wants to use the new deal to reinforce its entire infosec portfolio with its core mandate centering on the Guidance’s digital discovery and forensic products.
The terms of the agreement allow the Guidance Software to become a fully-owned contributory of OpenText. The purchase will close before the year ends. In the agreement, OpenText will pay Guidance shareholders $7.10 per share. The share price will be less than that of Guidance cash on hand of about $18 million, which makes the final price to come down to $222 million from the initial $240 million.
OpenText is known for its daring efforts, for instance, last year, the company bought Documentum for about $1.62 billion from EMC to compete on the enterprise content management. The current acquisition will give OpenText some functionality overlaps to its discovery and file analytics selections, which will include tools to clean up the network drives or detecting the sensitive text in the documents, and much more.
According to the analyst Cheryl McKinnon from Forrester Research, the purchase will also enable the company to have its own forensic tools to support their goals. OpenText has not been focusing on the forensic aspect of the business hence the new acquisition gives the company a chance to learn how to enhance security and profound information that could be accessed or copied.
Though OpenText is currently focusing on forensics, the company is also getting some advanced e-discovery equipment and a client list that may include over 78 Fortune 100 best companies across the world based on the Guidance.
OpenText, in general, don’t purchase technology instead, they buy established customer bases and milk out the revenues from these clients an effective financial strategy for them. According to Alan Pelz-Sharpe of Deep Analysis, this could be the starting point for OpenText when it comes to business acquisitions.
