And another one is acquired!

Kofax plc, a provider of capture driven business process automation solutions, announced on December 7th 2012 that it has acquired Singularity Limited, a provider of business process management (BPM) software and case management solutions.

Reynolds C. Bish, Chief Executive Officer of Kofax, said: “We’ve become a leader in the capture market by managing information into customers’ enterprise applications and repositories. The acquisition of Singularity will now allow our customers to manage that information as it flows through their organizations, expanding our reach beyond capture into the BPM market and providing a uniquely differentiated product with strong competitive advantages in both markets. We’re excited to deliver more capabilities to our customers and welcome the Singularity management team and its employees, customers and partners to Kofax.”

Padraig Canavan, Founder and Chief Executive Officer of Singularity, said: “We’re excited to now be part of Kofax, a proven leader in the capture market and natural fit for Singularity. Kofax’s direct sales force, large channel of value added resellers and global reach will significantly expand our access to the market. I’m very happy to continue as the Senior Vice President of BPM Software Sales at Kofax and, along with the Singularity team, remain fully committed to our future success.”

What is in this acquisition for Kofax? In the press release they talk about realising a number of strategic benefits. These include:

• The ability to increase its addressable market. Kofax’s core capture market is expected to grow from $2.2 billion in 2010 to $2.9 billion in 2013[1] at a 10% compound annual growth rate (CAGR). The BPM market is forecasted, according to Gartner in its 2011 report, to grow from $2.2 billion in 2010 to $3.1 billion in 2013 at a 12% CAGR.
• Customers will benefit from the capture-enabled BPM platform by being able to automate both the capture processes needed to enter content into enterprise applications and repositories as well as the downstream knowledge worker processes needed to effectively utilize that information. It will allow customers to invest in a single platform for automating all of their critical business processes and thereby enjoy a lower total cost of ownership and faster return on investment.
• The addition of BPM technology to their capture products will help them maintain a leadership position in that market.
• The combined Kofax and Singularity products will be fully deployable “on premise” or via private clouds under a traditional perpetual license model and via a public cloud under a Software-as-a-Service (SaaS) subscription model.

Bish commented on the way the acquisition was to occur by saying: “This transaction has been structured with a significant portion of the total consideration in the form of an earn out in order to maintain our strong cash position – which was $92.5 million at September 30, 2011 – and minimize integration and execution risk. We expect it to add approximately $8.0 million of revenue and be slightly dilutive on an Adjusted EBITA basis during our fiscal year ending June 30, 2012 but accretive in subsequent periods.”

Kofax has acquired all of Singularity’s stock for total consideration of up to $48.1 million in cash, net of cash held by the company on closing. Of this amount, $30.3 million was paid on closing of the transaction and $3.3 million will be paid one year from closing subject to certain indemnification terms and conditions. Additional payments totalling up to $14.5 million may be made one and two years following closing subject to the achievement of specific annual software license revenue growth rates and certain management employment conditions.

So, another player in the BPM market is acquired. Singularity has been a major UK player in the market since their inception. They have specialised in delivering BPM solutions for case management and won a number of major clients across the globe. Bloor see this as a recognition in the market of the importance of process in the business world, and the recognition by ERP and ECM vendors for the need for really good process definition and automation software to drive agility and flexibility.