OpenText Buys GXS for $1 Billion
February 18, 2014 Alex Woodie
Canadian enterprise software giant OpenText last month got a little bigger when it completed its $1.06 billion acquisition of EDI and B2B integration software and cloud services provider GXS. For IBM i shops, the deal is noteworthy in that it includes the TrustedLink EDI software that traces its roots back to Inovis, Harbinger, and Peregrine Software. But this deal is all about the cloud.
When GXS merged with Inovis in 2009, it created a B2B behemoth. At the time, GXS was considered by Forrester to be the top B2B service provider in the world, with more than 8 billion transactions per year, while Inovis ranked fourth with 1 billion transitions per year.
Now under OpenText’s umbrella, the company’s “combined cloud” will manage over 16 billion transactions per year across 600,000 trading partners and 40,000 customers, says OpenText CEO Mark Barrenechea.
GXS still offered the TrustedLink line of EDI translators, which are available on IBM i, Windows, and Unix servers. But this deal is clearly about giving Open Text more ways to help their customers manage information stored in all repositories. “The GXS acquisition expands our Information Exchange portfolio of solutions that include fax services, managed file transfer, secure e-mail, capture solutions, and electronic data interchange,” Barrenechea says in a blog post.
Open Text has no plans to change the service levels of existing GXS customers, Barrenechea says. “In fact, we plan to continue extending the services we acquired from GXS while strengthening our Information Exchange portfolio with the combined set of products,” he says.
By the way, OpenText also has an IBM i business of its own with the HostExplorer line of terminal emulation solutions originally developed by Hummingbird. The company occasionally helps customers access IBM i-resident data using its OpenText enterprise content management software, which continues to be its flagship offering.
According to the terms of the deal, Open Text paid GXS $1.065 billion in cash and nearly 1.3 million OpenText common shares worth $117.7 million. OpenText used $265 million of cash on hand and obtained financing of $800 million in debt in the transaction. Of the cash outlay, approximately $887.9 million was used to repay outstanding indebtedness on the part of GXS, and approximately $29.3 million was used to pay certain GXS transaction and other related costs.