Silicon Valley's recent spurt of corporate matchmaking continued Wednesday, with struggling software makers Interwoven Inc. and iManage agreeing to tie the knot in a $171 million marriage.
Sunnyvale-based Interwoven will pay $33 million in cash and 57.6 million shares of its stock to take over Foster City-based iManage. The Interwoven stock was worth $138 million Wednesday, with the company's shares closing unchanged at $2.40 on the Nasdaq Stock Market.
The $171 million price values iManage at $6.23 per share. IManage's shares fell 2 cents to close at $5.03 on the Nasdaq, then gained 61 cents in extended trading after Interwoven announced the friendly takeover.
The combination unites two software makers that specialize in making products designed to help businesses manage documents and other content.
Both Interwoven and iManage have a long history of losses and have recently been battling a sales slump that has tormented a wide range of tech companies in recent years. As of June 30, Interwoven had accumulated $352 million in losses since its inception and iManage had amassed losses of $47 million.
The companies are hoping they can become profitable by cross-selling their products to 2,500 combined customers and trimming millions of dollars in expenses.
With their union, Interwoven and iManage are following in the footsteps of several other Silicon Valley companies that have forged mergers as a way to rise above a high-tech wreck that has been smoldering for three years.
Most of the activity has occurred in the software industry, reflecting a widely held belief that there are too many financially crippled companies chasing after too few customers.
Other recently included software deals include: Business Objects buying Palo Alto-based Crystal Decisions for $820 million; San Jose-based Mercury Interactive buying Kintana Inc. for $225 million; and Sunnyvale-based Hyperion Solutions buying Brio Software for $142 million.
Copyright 2003 Associated Press. All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.
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