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Interwoven buys collaboration company

The software maker, a specialist in content-management applications, announces a $171 million deal to buy collaboration-software maker iManage.

Content-management software maker Interwoven said Wednesday it would buy iManage, a specialist in collaboration software, in a stock and cash deal valued at $171 million.

The companies--which began collaborating as partners earlier this year--said the merger will allow them to sell a full software package that addresses how an enterprises uses and shares documents and other types of content. Both company's products are based on Sun Microsystems' Java and Java 2 Enterprise Edition (J2EE) standards.

"This really creates the industry's only no-compromise solution," said John Bara, senior vice president of marketing for Interwoven. "Every supplier in the market today is strong in some areas and weak in others, but this is going to put us in a different league."

Interwoven is one of the leading players in the field of content-management software, a fast-growing market that consists of enterprise tools for cataloging, indexing and archiving content ranging from financial documents to Web text.

Although such tools are useful for businesses, customers have increasingly sought to pair them with collaboration software that lets multiples workers access and manipulate the same document. Documentum, one of Interwoven's chief competitors, has gradually added collaboration features to its software, using tools it acquired from eRoom.

"The content-management market has undergone a world of change in the last few years," said Dan Carmel, vice president of marketing for iManage. "Customers want a solution that really spans the full life cycle of content."

Under the terms of the deal, iManage shareholders will receive 2.09 shares of Interwoven stock and $1.20 in cash for each share of iManage stock. The deal is expected to close in the fourth quarter of this year.

Interwoven CEO Martin Brauns will continue as CEO and chairman of the combined company, and iManage CEO Mahmood Panjwani will assume the new position of vice chairman.

While the merged company will continue to sell some individual applications, Bara said, the focus will be on selling an integrated package that combines Interwoven and iManage tools. "Ideally, we'd like customers to buy everything from us at once, but sometimes customers want to take things in bite-size pieces," he said.