10 July 2003 Autonomy, the knowledge management software supplier, is buying video software specialist Virage for just under $25 million in a bid to boost its ability to manage unstructured information and broaden its customer base.
Autonomy has been steadily expanding its technology and business focus to include the categorisation, management and retrieval of all an organisation’s information, regardless of format.
Virage, say analysts, will help augment Autonomy’s Dremedia video technology. Virage’s products include : VS Webcasting, for planning and producing live webcasts and ‘on-demand’ searchable events; VS Production, for professional video production; and VS Publishing, for turning video and other rich media content into Internet programming.
Speaking about the deal, Dr Mike Lynch, CEO of Autonomy, said: “This transaction will enable us to further extend the adoption of Autonomy’s intelligent data operating layer as the key infrastructure for the automated management of all forms of unstructured information.” He added: “With the inclusion of Autonomy’s Dremedia video technology and Autonomy’s 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.”
Virage’s technology is well respected and the company has more than 400 customers, including many big-name media and communications organisations, such as the BBC, CNN, Bloomberg and Quantel.
The company’s financial performance, however, has been poor and the company was a clear acquisition target. For the year to 31 March 2003, Virage reported a loss of $18.1 million on revenues of $12.9 million, down from $16.7 million in 2002. Moreover, the company has been has forced to transfer to the Nasdaq SmallCap market from the Nasdaq National Market as it faced delisting for contravening the $1 minimum bid rule.
“We’re excited about this transaction as we believe it represents good value for our shareholders. At the same time, the transaction with Autonomy will enable Virage to provide enhanced products, as well as maintaining the support for the investment our customers have made,” said Paul Lego, Virage chairman and CEO.
Autonomy, which is paying a 2% premium on Virage’s share price, expects to close the deal in the third-quarter and says that combined Autonomy/Virage products should be generally available one quarter later.