Autonomy Corporation, a global infrastructure software company, and Interwoven, a global content management software company said Thursday they have entered into a definitive agreement under which Autonomy will acquire Interwoven for $775 million.

The acquisition will be funded by an underwritten placing of ordinary shares, a new revolving credit facility from Barclays and a portion of Interwoven and Autonomy's cash reserves.

Under the terms of the acquisition agreement, it is proposed that Interwoven stockholders will receive $16.20 in cash for each outstanding Interwoven share, representing a premium of 36.8% to the closing share price of $11.84 on Jan. 21, and a premium of 36.2% to the average closing share price over the 30 days through Jan. 21.

Post-close of the transaction Autonomy expects to have a cash balance of at least $75 million, assuming close in the second quarter of 2009.

The transaction is expected to achieve synergies of $40 million per annum over the first year from completion, from a combination of duplicative general and administrative, marketing programs and other redundant costs.

The acquisition expected to be earnings enhancing in the first full quarter following completion, with expected earnings accretion of 20% in 2009 assuming completion had happened on Jan. 1. Significant brought forward tax losses will be assumed, the Company said.

The Acquisition is expected to complete in the second quarter of 2009 and is subject to Autonomy and Interwoven shareholder and regulatory approvals and other customary closing conditions.

A combined customer base of in excess of 20,000 will provide additional scale and significant cross-selling opportunities. The acquistion offer the opportunity to provide broader and more comprehensive offerings to customers.

Combining the two companies will accelerate the delivery of the next generation unstructured information management software, the Company said.

The Acquisition will strengthen Autonomy's access to the worldwide legal and compliance industry through Interwoven's significant sales force with industry expertise.

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