Dell Sells EMC’s Documentum Business to OpenText
Dell Technologies has sold EMC’s Documentum business to OpenText for $1.62 billion, or roughly 2.7 times the division’s 2015 revenues. The move was widely expected. Pundits now wonder if Dell will sell EMC’s RSA security business as well.
Dell Technologies officially launched last week when Dell completed the long-awaited EMC buyout. Both companies have been recalibrating their staffing and product mixes over the past year. Dell has also sold off the Quest Software and SonicWall businesses to private equity investors; those deals are expected to be finalized by November 2016 or so. Dell will also cut 2,000 to 3,000 employees, reports suggest.
The Documentum business, meanwhile, is expected to be immediately accretive to OpenText’s business, meaning that the enterprise information management (EIM) company will see immediate profits from the deal. Dell and OpenText expects the deal to close within 90 to 120 days.
Barclays acted as a financial advisor to OpenText and provided a $1.0 billion debt commitment in support of the transaction. OpenText is pursuing additional financing for the deal, though the transaction isn’t subject to more financing, the company says.
Documentum Channel, Cloud Alternatives
The Dell-OpenText transaction arrives as businesses of all sizes rethink their document strategies. Many companies see SaaS offerings like Box and Dropbox as a natural path forward, though EIM proponents insist Documentum and other enterprise-class options were designed with security and compliance in mind.