Interwoven unwound: HP Inc sells its marketing unit to OpenText

Contact: Scott Denne

HP Inc unloads some of the lesser bits of its regrettable acquisition of Autonomy with the $170m sale of HP Engage to OpenText. Many of the key pieces of Autonomy – acquired in 2011 for $11.7bn and shortly thereafter written down – remain with Hewlett Packard Enterprise (the software side following HP’s breakup). HP Engage includes most of the assets from Autonomy’s 2009 purchase of Interwoven.

At the time of the split of the original HP, the company hung out a ‘for sale’ sign by housing HP Engage – its customer experience and marketing software unit – within its printer division. Despite its seeming eagerness to unload those assets, HP scored a decent price. According to 451 Research’s M&A KnowledgeBase, the sale values the business at just a hair under 2x revenue and compares quite favorably with the 1.4x median multiple for divestitures from public companies over the past 24 months.

Still, the deal marks the culmination of a steep descent for Interwoven, which fetched $775m in its 2009 sale to Autonomy. With this transaction, OpenText adds content management (HP TeamSite), digital asset management (HP MediaBin), call-center management (HP Qfiniti) and website personalization (HP Optimost), among other capabilities. Along with iManage, which HP sold to the division’s management team last summer, HP has now offloaded Interwoven.

From the other side of the table, the move follows OpenText’s template. In HP Engage, as in many of its acquisitions, OpenText obtains a fading software asset that’s generating cash from a business that’s somewhat complementary and slightly overlaps with OpenText’s existing offering. The valuation falls a bit lower than the 2.3x median multiple on OpenText’s deals this decade – the company has never cracked the 3x mark.