Autonomy buys video software rival
The enterprise software maker is acquiring video technology specialist Virage in a $25 million deal that should boost its presence in the broadcast market.
Through the purchase, Autonomy acquires a key rival and its 400 customers for enterprise video and rich media identification software. It also pushes its technology for cataloging corporate data into new markets, such as entertainment and education, in which Virage is a dominant force.
"With the inclusion of Autonomy's Dremedia video technology and...infrastructure software at the core of the Virage products, we believe that Virage will be better able to take advantage of its clear leadership position," Autonomy CEO Mike Lynch said in a statement.
The enterprise software maker, which employs 211 people worldwide, will bring on about 65 employees, including 20 salespeople, from Virage. About 32 employees at Virage, which is also based in San Mateo, Calif., will be laid off, according to Autonomy.
Under the deal, Autonomy paid $1.10 per share of Virage stock, for a fully diluted cash purchase price of $24.8 million. That includes a net cash purchase price of $13.3 million, adjusted for Virage's expected cash balance as of Sept. 30, 2003. The deal is expected to close in the third quarter of 2003.
Autonomy, which has headquarters in San Francisco and Cambridge, England, develops corporate software that analyzes text, video or audio files; identifies their meaning and contents; and tags, organizes and synchronizes related data for easy retrieval. Its subsidiary, DreMedia, uses this core technology to make products for the broadcasting and streaming video industry, with customers including the British Broadcasting Corp. (BBC), CNN and digital video equipment maker Quantel.
Virage's technology competes with DreMedia. Autonomy said it plans to replace much of Virage's software with its own, while maintaining Virage as an independent brand.