HP to Acquire Tower Software
Clinches deal to buy Australian e-discovery vendor for $3.08 per share
April 1, 2008
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HP has entered into a pre-bid agreement to buy Australian records management specialist Tower Software in an attempt to bulk up its e-discovery business.
"With the acquisition of Tower Software, we will add records management capability to our compliance archiving solutions," said Robin Purohit, vice president of HP's information management software division, on a conference call last night.
The exec explained that HP is offering 3.39 Australian dollars ($3.08) per share, although he did not disclose the total value of the transaction.
"We expect that the shareholders will accept in Q2 and we will close in Q4," he added. "This offer has the unanimous support of the [Tower] board and the three largest Tower shareholders."
Tower, which started life as a paper records management company in the '80s, is now heavily involved in e-discovery software, touting its flagship TRIM Context software as a way for users to meet the demands of Sarbanes Oxley, HIPPA, and the Federal Rules of Civil Procedure (FRCP).Over the last few years, the Canberra, Australia-based vendor has extended its e-discovery offering from email into other applications, most notably Microsoft Sharepoint.
"It's a big market opportunity for HP -- we're seeing tremendous shake-up and disruption in the enterprise content management market," said Purohit. "While e-discovery has mainly focused on email, I think that Microsoft Sharepoint is the next big opportunity for e-discovery and compliance."
HP is also getting its hands on Tower's 1,000-strong customer list, which includes oil giant Shell and the NMCI in the U.S. The NMCI is reputed to have one of the world's largest SANs. "We have just completed a deployment to 360,000 [NMCI] users," explained Martin Harwood, the Tower Software CEO, during last night's conference call, adding that the Shell project covers around 125,000 users.
Execs on the call also confirmed that most of Tower's 200-plus employees will be moving over to HP when the deal closes later this year. "Clearly, we're buying a great company, with great people our intent is to find opportunities for virtually all of those people," said Purohit, in response to a question from Byte and Switch.
Tower's CEO added that the two firms are still working out their integration plan. "We're already looking at how the two organizations come together [and] what roles various people on my management team and myself will play. I am completely open-minded on what my ongoing role will be, only time will tell that."HP would only confirm that Tower Software will become part of its Information Management business unit when the deal is closed. The firms' integration plans will likely be helped by the fact that TRIM Context has already been built into HP's Integrated Archiving Platform under an existing deal between the two companies.
The Tower Software acquisition follows rival EMC's purchase of e-discovery services specialist Infra for an undisclosed fee and Dell's $155 million deal to buy MessageOne.
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MessageOne
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