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OpenText could soon see upside from HP acquisitions, says Industrial Alliance


OpenTextAnother deal to acquire assets from Hewlett Packard has Industrial Alliance Securities analyst Blair Abernethy feeling good about OpenText (OpenText Stock Quote, Chart, News: TSX:OTC).

This morning, OpenText announced it had entered into a definitive agreement to acquire customer communications management (CCM) assets from HP for (U.S.) $315-million. The Ottawa-based company said the deal would allow it to better serve its own CCM offerings.

Abernethy, noting that this is the second deal OpenText has made with Hewlett Packard, following the $170-million acquisition of TeamSite in May, says the deals taken together are not slam dunks, but complementary pieces of the puzzle.

“In our view, these tools, while not likely high growth product lines, complement and reinforce OpenText’s extensive Enterprise Information Management product offering,” says the analyst. “We see near term upside to our target from the pending HP and Recommind acquisitions (not yet in our estimates), as well as from the potential Documentum acquisition, which could occur in the next few weeks.”

In a research update to clients today, Abernethy maintained his “Buy” rating and one-year target of $58.00 on OpenText.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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