IBM and FileNet Corporation announced that the two companies have entered into a definitive agreement for IBM to acquire FileNet, a publicly held company based in Costa Mesa, Calif., in an all-cash transaction at a price of approximately $1.6 billion, or $35 per share. The acquisition is subject to FileNet shareholder approval, regulatory reviews and other customary closing conditions. It is expected to close in the fourth quarter of 2006.

FileNet is a leading provider of business process and content management solutions. This acquisition builds upon IBM's Information on Demand initiative, launched in February 2006, to address the growing market opportunity around combining IBM's software, services, partners and industry consulting expertise to improve clients' business performance. The Information on Demand strategy aims to provide clients with data exactly when and how they need it to improve their business processes, quickly respond to market needs and rapidly identify new business opportunities.

A convergence of challenges facing businesses today - including globalization, mergers and acquisitions, information overload and regulatory compliance - are driving companies to find new ways to gain insight from their information so they can use it to grow their business. IBM's acquisition of FileNet aims to further the company's Information on Demand initiative, IBM's strategy for addressing this growing market opportunity.

With information volumes growing and customers facing greater competitive pressures to be more responsive and efficient, enterprise content management (ECM) and business process management (BPM) are becoming more critical for improving business performance. IBM's acquisition of FileNet will allow customers to benefit from the combined capabilities of both companies - from ensuring content is delivered and utilized in context of their business processes to achieving effective compliance, archiving and document retention.

IBM plans to build upon the advanced Content Management technologies of both companies to provide customers and partners with industry-focused, high value solutions that are able to proactively capture and deliver content as part of a business process. These technologies can be integrated into IBM's service oriented architecture (SOA)-based capabilities, including business process management and information lifecycle management.

Customers are making platform standardization decisions for ECM and are buying solutions that help build their core enterprise infrastructures. This requires open standards, a broader, integrated set of content management capabilities, and better integration with business applications, which reduces total cost of ownership.

Following completion of the acquisition, IBM intends to:

  • Combine FileNet's operations with IBM's Content Management business in the Information Management unit led by General Manager Ambuj Goyal.
  • Preserve and enhance customer investments in both FileNet and IBM Content Management platforms, leveraging IBM's market-leading Information Integration technology to develop broader ECM solutions.
  • Integrate IBM's BPM and service-oriented architecture technologies with the FileNet platform.
  • Train IBM and FileNet partner and services teams on both IBM and FileNet technology.

Through this acquisition, the thousands of customers using IBM and FileNet solutions will now have a more powerful base of industry-leading content management products to build upon as they explore next-generation information management solutions.

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