Autonomy is acquiring its rival Zantaz, a provider of e-discovery and content archiving software, for almost £180m in cash.
Autonomy, based in Cambridge, will operate Zantaz, headquartered in California, as a division of the parent company. Zantaz CEO Steve King will retain his position at the Zantaz division.
The publicly traded Autonomy posted net profit of £24m on revenue of £125m in 2006, while privately held Zantaz reported $106m (£53m) in revenue, according to a May 2007 research report by analysts IDC.
E-discovery is an emerging market within the field of data storage, archiving and recovery. Organizations are increasingly being called upon to produce copies of electronic documents, such as e-mail, voice mail and instant messages, to respond to lawsuits or government investigations.
IDC reports the global market for e-discovery software and hosted services grew to $477 million in 2006, an increase of 47 percent from 2005's $330 million. The revenue split between software and hosted services is about 60-40 IDC reports.
The combination of Autonomy and Zantaz will bring together consolidated archiving, e-discovery, analytics and real-time policy management services into one system, the companies stated in a news release.
Autonomy says the acquisition will produce cost savings of $25 million a year and be accretive to earnings in six months. The deal is expected to close by August, assuming shareholder and regulatory approvals are granted.