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Content software companies to merge

Stellent announces plans to buy Optika in a deal worth $59 million, following rivals in using an acquisition to diversify its product list.

The content management software industry continued to shrink on Monday, when software maker Stellent announced plans buy Optika.

The deal is the latest in a string of acquisitions and mergers involving companies that make enterprise content management (ECM) tools, which help an organization catalog and reuse assets ranging from software code to catalog photos. Storage giant EMC gave the fast-growing ECM segment its biggest shake, with its planned $1.7 billion buyout of Documentum.

Stellent's main product is Universal Content Management, a package of applications for managing and delivering content via Web site and corporate portals. Optika makes document-imaging products for converting paper documents into electronic versions, records management software for handling regulated documents, along with other specialty content tools.

Stellent executives said the planned buyout, which calls for the company to pay out $10 million in cash and about $49 million in stock, will allow Stellent to offer a more complete approach to managing and sharing business content. Stellent's tools focus on managing dynamic content distributed over networks, said Dan Ryan, executive vice president of marketing at Stellent. Optika's products deal with more static business documents.

"Our software is really about dynamic, high-access, low-volume content; theirs is about high-volume, low-access content," Ryan said. "Putting them together will give us a solution we think solves the broadest set of problems out there."

The deal mirrors recent moves by Stellent's competitors, which have used acquisitions to diversify their product list and tap into emerging markets. ECM software maker OpenText recently announced plans to acquire Ixos Software, while Interwoven snapped up collaboration software specialist iManage.

"A key strategy in IT today is to really reduce the number of vendors you deal with," Ryan said. "We're seeing people who have brought a variety of different content management systems, and now, they need to reduce the number of systems. We can do that now by going in there with a full product set."