CIMdata PLM Industry Summary Online Archive

10 May 2005


Captiva to Acquire Leading French Input Management Technology and Solution Provider SWT; Long-Time Partner to Expand Captiva's Geographic Coverage, Extend its Vertical Market Expertise and Bring Synergistic Technologies

Captiva Software Corporation , a provider of input management solutions, announced it has signed a definitive agreement to acquire SWT SA , a provider of automatic data extraction and intelligent document capture solutions and technology in France. The purchase, subject to customary closing conditions, is expected to be completed during the week of May 23, 2005.

According to the agreement and subject to certain adjustments, Captiva will pay approximately $18.1 million in cash plus approximately 179,000 shares in Captiva common stock that will be issued to SWT management to purchase all outstanding shares of the privately held SWT. Net of SWT's cash, the purchase price is expected to be approximately two times SWT's reported 2004 European GAAP revenues of EUR 6.95 million, or approximately $9.0 million, which were 25% greater than its comparable 2003 revenues. SWT has reported that its operations in France have been profitable since 2000, but that the company has incurred consolidated losses as a result of expanding into international markets. While Captiva anticipates significant revenue synergies to occur, it expects SWT to be profitable and the acquisition to be accretive to Captiva's earnings on a pro forma basis, excluding one-time charges and the amortization of purchased intangible assets, no later than the fourth quarter of 2005 through cost savings alone. Updated revenue and earnings guidance reflecting the acquisition will be provided in Captiva's second quarter earnings conference call, which is currently scheduled for July 26 at 1:30 PM PST.

SWT has been a technology partner of Captiva's since 2002, supplying its DispatcherT product capabilities as an optional addition to Captiva's InputAccel® and, through a 2004 OEM agreement, classification and data extraction capabilities for Captiva's Digital MailroomT. The acquisition is consistent with Captiva's stated strategy of augmenting its organic growth by acquiring companies that expand Captiva's geographic coverage, provide additional vertical market expertise and add synergistic technologies. This acquisition achieves all three objectives, as SWT has a strong market presence in the French and Spanish markets, it strengthens Captiva's mailroom and invoice processing expertise and provides an installed base of reference sites for those capabilities and it brings advanced classification and data extraction technologies that Captiva can leverage into its products, customer base and channels.

"This acquisition is the culmination of the long-term, mutually beneficial relationship we've shared with SWT. As one of our key technology partners, we worked closely with SWT on some significant Digital Mailroom wins last year and have always been impressed with the company's products and staff," said Reynolds C. Bish, Captiva's President and CEO. "SWT is a rapidly growing company with a substantial revenue stream, outstanding products, talented employees and a strong customer base numbering over 400 on a worldwide basis. We're excited about this transaction and look forward to welcoming SWT's employees, customers and partners to Captiva and jointly building an even more successful combined company." Mr. Bish added that the transaction will add approximately 80 employees to Captiva, with the majority of them operating out of SWT's Paris headquarters.

"Since founding SWT in 1988, we've been successful in growing our business through introducing innovative, proven solutions such as our b-WizeT and Dispatcher products, obtaining a blue chip customer base, raising venture capital financing, garnering numerous industry awards, such as being part of Deloitte & Touche's 2004 EMEA Technology Fast 500, and expanding our market reach beyond France," said Herve Debbah, SWT's President, CEO and Founder. "We've had a very clear vision for continuing our growth as an independent entity. However, we recognized that merging with Captiva offers significant synergies and the opportunity to establish a truly dominant leader in the input management market. We look forward to joining Captiva and working with its management team and staff on this endeavor."

Captiva and SWT will demonstrate their solutions at next week's AIIM Conference and Exposition, taking place May 17-19 in Philadelphia, PA. Captiva will be exhibiting in booth number 712; SWT in booth 848.

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