ECM Supplier Imanage Leaves The HP Fold PDF

ECM supplier iManage leaves the HP fold
9/13/16, 10:58 AM
DEAL ANALYSIS
ECM supplier iManage leaves the HP

fold
JULY 21 2015
BY ALAN PELZ-SHARPE (/BIOGRAPHY?EID=600)
As HP heads toward its split into Hewlett-Packard Enterprise and HP Inc,

various offerings in the company's enterprise content management (ECM)
portfolio are finding new homes. In May, the Process Automation and
Teleform groups were moved into HP Inc (the printer division), and now the
iManage products that HP obtained when it bought Autonomy Corp in 2011
are being divested altogether via a management buyout (MBO).
Acquirer
N/A (management
buyout)
Target
iManage (HP)
Subsector
Enterprise content
management
Deal value
Not disclosed
Date announced
July 21, 2015
Closing date
July 21, 2015
The 451 Take

In recent years, iManage has become the journeyman of ECM, and one can say for sure that the
company's founders and team are passionate about their purpose and direction. The challenge for
them will be to play well with lighter-weight collaborative alternatives that are growing quickly,
https://451research.com/report-short?entityId=86102
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rather than get into a head-to-head fight with them. The strategy will most likely be to duck and
weave any potential blows by delivering highly specialized cloud and mobile-first applications that
can be sold at a premium for critical business activities.
Deal details
Neil Araujo and Rafiq Mohammad, the original founders of iManage, have undertaken an MBO of HP's
iManage ECM assets using both their own money (with management holding the majority of the equity)
along with debt financing from the Bank of Montreal. Founded in 1995, iManage went public on the
Nasdaq in 1999. In 2003, the company was purchased by dot-com darling Interwoven, which in turn
was scooped up by Autonomy in 2009.
But the story doesn't end there: Autonomy was acquired in an acrimonious deal by HP in 2011.
Bizarrely, iManage remained fairly intact throughout this rollercoaster ride, and it is still based in
Chicago. We estimate that annual revenue for the company is roughly $100m. It has approximately
3,000 customers and 150 employees, and plans to grow substantially going forward.
Rationale
In contrast to the recent divestiture of Syncplicity by EMC (/report-short?entityId=85971), with EMC
essentially dumping a division that was losing money at a rapid pace, iManage is actually profitable and
growing within HP. Even so, iManage has long been a poor fit within HP as a whole. The company came
to HP almost by accident in that it was part of the bundle of moving parts that made up the bulging
Autonomy portfolio in 2011. That transaction turned very sour indeed, with accusations of fraud flying
and lawsuits and potential criminal charges pending (/report-short?entityId=76449).
HP's interest was not in iManage but in the alleged promise of the Autonomy IDOL search offering. The
company provides collaborative document management software for professional service firms with a
particularly large footprint in the legal vertical. This deal releases the core iManage products, as well as
provides licensing for iManage to continue to leverage IDOL for its enhanced search capabilities.
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Since Autonomy's pickup by HP, iManage has trundled along without too much interference as a
relatively independent entity within its parent this won't be a big loss to HP and the move puts
iManage back in the hands of its founders, who feel passionately about its future. As if to reinforce the
poor fit within HP, the future for iManage is in delivering specialist business applications to professional
services such as legal, financial and government. Like Syncplicity, it's not a billion-dollar business nor
will it ever be, and as such is not of interest to a player on the scale of HP. Even so, iManage is a very
well-known brand, particularly in the world of legal. But it has been in the shadows for a long time now
and will need to aggressively market itself, as well as deliver refreshed products to change the perception
of them as being legacy systems and thus become relevant for younger professionals and top of mind in
application refresh cycles.
Competition
The competitive landscape for iManage is very different from the one that it faced when it was last
independent. Though original rivals such as Microsoft SharePoint, OpenText and EMC (Documentum)
are certainly still around and active, many new players are entering the space and causing some
disruption. On one side are ECM players growing via M&A such as Lexmark and Upland Software on
the other side are newer contenders like Box, Dropbox, Jive and Slack. Furthermore, a raft of secure
collaboration providers are also targeting the same markets vendors such as VMware (Content
Locker), Accellion and Intralinks. Though all of these players may lack the industry- and process-specific
functionality that iManage offers, they could do a good enough job at a low enough price to muddy the
waters and freeze others out.
Alan Pelz-Sharpe (/biography?eid=600)

Research Director, Social Business
COMPANY MENTIONS (PRIMARY)

M&A ACTIVITY BY SECTOR
Information management / Content

HP Inc , iManage (/search?company=iManage)

COMPANY MENTIONS (OTHER)
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management (732)
Accellion , Bank of Montreal , Box , Dropbox , EMC , Hewlett Packard Enterprise , Autonomy
(https://makb.the451group.com/results?
Interwoven , Intralinks , Jive Software , Lexmark , Microsoft , OpenText , Slack Technologies ,
basic_selected_sectors=130)
Syncplicity , Upland Software , VMware (/search?company=VMware)
M&A ACTIVITY BY ACQUIRER
CHANNELS
Box Inc. [fka Box.net Inc.] (6)
Business Applications , Development, DevOps & IT Ops (/dashboard?
view=channel&channel=7)
basic_acquirers=Box+Inc. [fka
Box.net Inc.])
SECTORS
Dropbox Inc. (24)
All / Information management / Content management (/search?sector=130)
basic_acquirers=Dropbox+Inc.)
EMC Corporation (77)
basic_acquirers=EMC+Corporation)
Hewlett-Packard Company [dba HP
Inc.] (73)
basic_acquirers=HewlettPackard+Company [dba HP Inc.])
iManage, Inc. (1)
basic_acquirers=iManage,+Inc.)
Jive Software (8)
basic_acquirers=Jive+Software)
Lexmark International Inc. (13)
basic_acquirers=Lexmark+International
Inc.)
Microsoft Corporation (157)
basic_acquirers=Microsoft+Corporation)
OpenText Corporation [aka Open
Text] (35)
basic_acquirers=OpenText+Corporation
[aka Open Text])
SpringSource Inc [fka Interface21]
[VMware] (40)
basic_acquirers=SpringSource+Inc
[fka Interface21] [VMware])
Figures shown indicate number of
transactions
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