This time around, it’s their Canadian neighbor Nstein Technologies Inc. (news, site) -- the makers of TME (Text Mining Engine). Data mining and analysis, and not necessarily WCM or DAM, is likely the main focus of this deal.
(Still) Continuing the CMS Quilting Exercise
As if the RedDot and Vignette saga wasn’t enough, Open Text is bringing on yet another Web CMS product into its quilt of content management technologies.
With Nstein, however, there’s also a nice touch of semantic search technologies, as we in detail showed you recently, when the vendor released Semantic Site Search (3S). Not to mention Nstein's Text Mining Engine (TME), which we think might be the main focus of this deal.
As of now, the two entered into a definitive agreement, by which Open Text will acquire all of the issued and outstanding common shares of Nstein through an Nstein shareholder-approved amalgamation with a subsidiary of Open Text under the Companies Act (Québec).
Nstein shareholders will receive CDN $0.65 in cash for each Nstein common share. As of Friday 02/19/2010, Nstein shares were at $0.34, with average volume of 28,675 shares and the 52-week range from $0.23 to $0.55. All in all, not a bad deal for Nstein shareholders, as the Open Text purchase price represents a premium of approximately 100% above the 30-day trading average.
The entire transaction is valued at approximately CDN $35 million.
What to Expect
The transaction is expected to close in Q2, if two-thirds of Nstein’s shareholders agree, making Open Text shareholders warm and fuzzy, and showing some growth (albeit, not organic) for Open Text itself.
Aside from upcoming layoffs at Nstein, we have a feeling that Open Text will concentrate on the data mining side of things with Nstein and, eventually, stop supporting the WCM/digital publishing arm of Nstein (after milking that cash cow).
Nstein has been doing a good job on the data mining and semantic search fronts lately, and there’s enough products in Open Text portfolio as it is to publish pages and manage digital assets, but:
A - decent, in-house built semantic search engine
D - data mining through Text Mining Engine (TME) (would be a nice addition to Vignette, no?)
are all, more or less, a breath of fresh air for Open Text.
As Open Text’s president and CEO John Shackleton hinted, "Nstein will … add complementary technology and expertise that enhances our ECM solutions portfolio."
Some of Nstein's rich media management technology can be weaved in nicely with one of Open Text's previous acquisitions -- Vizible (check our coverage of that here). Vizible’s solutions provide the ability to create rich visual user experiences, including 3D navigation, and cross-channel content delivery (cell phones, PDAs, web).
Given the fact that we haven't heard anything about what Vizible is doing since the acquisition, we think that will change soon, as Open Text starts working on the marriage of Vizible and Nstein.
Another stranger we haven't heard from is Open Text Social Media product. Do you see any opportunities for Nstein's technology there?
It will be interesting to see what happens to Picdar, a U.K. digital asset management (DAM) vendor that Nstein acquired back in 2008. Open Text’s Artesia acquisition does precisely DAM, and there’s no good DAM reason to combine the two products, maybe only to continue selling them both (yet, with focus on the more expensive Artesia), but to different market segments.