Vignette splashes out $125m on Tower Technology

Australian enterprise content management company Tower Technology has been bought by Vignette for $125m.

The deal, which involved $45m in cash and $80m in Vignette shares, completes an 18-month acquisition strategy designed to "fill out" Vignette's ECM software portfolio, according to Bryce Johnson, senior VP and general counsel for Vignette.

"We now have the only complete enterprise content management software available from any vendor," said Johnson. "Tower had everything we needed without having any conflict with our existing products."

Analyst group Ovum agreed that Tower Technology's products were a good fit for Vignette's product set, and said the Australian company also bought a well established customer base. Ovum claimed there was a lot of integration to be done with the product sets, and said this might be made more difficult by the geographic spread of the two companies over different continents.

However, Vignette does not expect the integration to be a problem, and sees the geographic divide between the US and Australia as a positive.

"Every Vignette product is built using J2EE, so it's easy to integrate the products together," said Mike Kearney, director of product marketing, Vignette. One of the reasons Vignette targeted Tower Technology was because of the compatibility between the two architectures. According to John Palin, director of RMD at Tower Technology, some components of Tower Technology products could be used straight away, but a full decision on the process of integrating the two product suites would be forthcoming.

According to Johnson, Vignette is strong in the US and Latin America, while Tower Technology is strong in Asia Pacific and Europe. The companies are also anticipating cross-selling opportunities between the two product suites.

The 50-person research and development team of Tower Technology will continue to be based in Australia, with Vignette executives saying they appreciated the lower cost of development in this country.

The ECM industry is undergoing a round of consolidation, with the most significant acquisition occurring in October 2003 when ECM acquired Documentum for $1.7bn.

James Pearce writes for ZDNet Australia