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Open Text to acquire Texas software firm

Canadian software developer Open Text Corp. says it plans to acquire Vignette Corp. in a friendly cash and stock deal valued at $310-million (U.S.).

The deal was announced ahead of Open Text's third-quarter financial report, which included $22-million, or 41 cents per share, in net income and $192-million in revenue, both up substantially from the comparable period a year ago.

Open Text of Waterloo, Ont., is the market leader in enterprise content management software, used by organizations to produce and keep track of electronic mail and other electronic documents.

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It says Texas-based Vignette brings technology that will enhance Open Text's product line.

Vignette shareholders will receive $8 in cash plus 0.1447 of an Open Text common share for every Vignette common share, which equates to $12.70 at the end of May 5.

Vignette is based in Austin and has approximately 700 employees.

Open Text shares closed at $36,24 (Canadian), down $1.99 or 5 per cent on the Toronto Stock Exchange before the quarterly report was issued.

The company's adjusted net income, which is widely followed by analysts, was $31.4-million (U.S.), or 59 cents per share on a diluted basis, up 24 per cent compared to $25.4-million, or 48 cents per share on a diluted basis, for the same period in the prior fiscal year.

In the year-earlier period, Open Text revenue was $178.8-million and net income was $7.3-million, or 14 cents per share.

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