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M & A: Hyland Software is Off the Market

An attractive acquisition target for the bigger players in the enterprise content management space because of their success in both the healthcare and banking industries, the purveyors of the OnBase document management solution have gone in a different direction and agreed to be acquired by a private equity firm.

Chris Hyland, CFO of Cleveland-based Hyland Software Inc., announced that the private equity firm of Thomas Cressey Bravo will acquire a 58% stake in Hyland Software. The aforementioned 58% stake comes from the sale of shares held by friends and family of Packy Hyland, the original founder of Hyland Software. As mentioned by Alan Pelz-Sharpe of CMSWatch, the price tag for controlling interest of Hyland software — US$265 million, including US$150 million in equity — seems to be relatively high considering Hyland Software posted revenues in the US$70 million range for 2006.

So the Hyland brothers seem to have gotten a solid deal and at the same time an opportunity to step beyond organic growth as they play ball in the quickly expanding Enterprise CMS market.

As reported, there are no indications that Hyland Software will change it’s strategy of continuing to improve and market their OnBase product to customers in the banking and healthcare sectors. And the company’s management intend to retain the majority of executive leadership, with only slight changes at the tippy top.

Overall, this appears to be good news for the employees of Hyland Software. They will be able to continue to do what they have been doing, but with a touch more security about the future a some more cash to play with. Moreover, with this move Hyland is serving notice that they are not content to simply be a small fish in a big pond. They plan to compete. And the new arrangement proves they’ve got more than warm air as they take their place at the enterprise content management table.

Established in 1991 and lead by A. J. and Chris Hyland, Hyland Software is the developer of OnBase, a suite of enterprise content management applications. The OnBase ECM suite includes document imaging, workflow, electronic document management, COLD/ERM and records management — in total there are more than 80 modules in the product suite. The company employs over the 600 people, is based in Cleveland, Ohio and has international operations.

Recently Hyland partnered with Datawatch for BI integration and just today they were lauded by Mortgage Tech Magazine for their document imaging and management solution.