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Friday, May 26, 2006

Private Equity Play : Hummingbird Acquired

Romesh Wadhwani's Symphony is all set to acquire Hummingbird for 465 million USD, subject to all clearances. With this Hummingbird becomes a part of the list of symphony group companies. Private equity players are getting more and more bold and are expected to move in fast and begin acquiring medium and large technology companies. I personally believe that a lot more midtier companies particularly in the ECM space are likely to look at opportunity to get acquired. In the last few months, Broadvision has been desperately trying to get acquired. There is speculation about the fate of Opentext, the other canadian player in the ECM space.

Coming to Hummingbird, they were clearly early movers in several areas of ECM. In fact in was also amongst the first to buy out related companies like Fulcrum etc. long back and some of the alignments they had (like the one with Microsoft) clearly showed focus. It might not have had the same mindshare of say a Vignette or Interwoven but was a strong player. Amongst the ECM players Hummingbird was amongst the first to focus on verticalised solutions. In fact I more or less thought that Hummingbird was losing share when I got bolted when I heard of a few wins that they have managed to clock recently. A leading industry analyst expressed surprise in a recent interview that I chose to exclude them in my ECM market movers and shakers list . Coming to the acquisition, I think that the pricing was slightly more but I think symphony has made a good pick. If symphony manages to leverage Hummingbird’s strength and give it the chance to expand into a platform – it would be good. For now customers would have nothing to worry about.Symphony is also promising to continue with Hummingbird as it is – the additional resources could help the company substantially. Look at Documentum -post EMC acquisition,it has tremendously helped them grow. Hummingbird has to just continue innovating and reposition, beef up its market image. After all none of the big Enterprise players – SAP, Oracle, Infor + SSA have any credible offering in this space.

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