IBM to Buy FileNet for $1.6B

IBM plans to acquire FileNet, a document management and business process management software vendor, in an all-cash deal valued at $1.6 billion.

IBM on Thursday said it plans to acquire FileNet, a document management and business process management software vendor, in an all-cash deal valued at $1.6 billion--IBMs 20th acquisition since February around its "information on demand" strategy.

FileNet, based in Costa Mesa, Calif., had $421.8 million in revenues for 2005, up 6% compared with the prior year. The company, founded in 1982, has 1,695 employees. FileNet claims to have more than 4,300 customers.

The acquisition, which the companies expect to close in the fourth quarter of 2006, is subject to approval by FileNet shareholders as well as regulatory bodies.

Once the deal is completed, IBM plans to combine FileNets operations with IBMs Content Management business in the Information Management unit, which is headed by general manager Ambuj Goyal.

"Freeing up information contained in content management systems is critical to unlocking the potential of information to improve business processes and performance," Goyal said in a statement.

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