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Interwoven Announces Acquisition of Scrittura, Expanding its Portfolio of Industry-Leading ECM Solutions for the Financial Services Market

  • 19 August, 2005 10:09

<p>ECM Leader First to Provide Complete Solution to Address Rapidly-Growing Market for the Automation of Complex Non-Exchange Based Trades</p>
<p>Sydney, Australia - August 19, 2005 - Interwoven, Inc. (Nasdaq: IWOV), provider of Enterprise Content Management (ECM) solutions for business, today announced that it has acquired Scrittura, the leading provider of document automation technology and straight-through-processing for the complex non-exchange based trading operations of financial services institutions. The strategic acquisition maps to Interwoven’s strategy to deliver targeted ECM solutions, and positions Interwoven as the leading ECM provider in the rapidly growing market for the trading of non-exchange based financial instruments. As a result of the acquisition, Interwoven is now the first ECM vendor to offer a complete solution for the automation of Over-the-Counter (OTC) Derivatives trading.</p>
<p>Under the terms of the agreement, Scrittura shareholders will receive initial cash consideration of approximately $16.3 million and up to $2.0 million of additional cash consideration if certain revenue and operating contribution goals are achieved by December 31, 2005. In addition, Interwoven will assume certain Scrittura stock options in the acquisition. Interwoven preliminarily expects the impact of the acquisition to be dilutive to earnings in the third quarter of 2005, computed in accordance with generally accepted accounting principles, by approximately $0.03 to $0.06 per share. These GAAP estimates are preliminary and subject to change as the Company completes its allocation of purchase price. On a non-GAAP basis, Interwoven expects the acquisition to result in a $0.00 to $0.02 decrease in non-GAAP earnings in the third quarter. Interwoven expects the acquisition to be neutral to slightly positive to non-GAAP earnings and slightly negative to GAAP earnings in the fourth quarter of 2005. Non-GAAP estimates exclude the impact of amortisation of intangible assets and deferred stock compensation, a possible charge for in-process research and development and merger integration charges, the amounts of which have not been determined.</p>
<p>The Interwoven OTC Derivatives solution is the first solution Interwoven is delivering based on the acquisition to address a critical need within the burgeoning market for non-exchange based trading. Interwoven believes a number of factors have contributed to the need for a specific, targeted solution for straight-through-processing of OTC Derivatives confirmation:</p>
<p>• Market Growth—According to The Bank of International Settlements (BIS), the OTC derivatives market has grown at a compound annual growth rate of 31 percent since 2001, with a reported value of over $220 trillion at the start of 2005.</p>
<p>• Technology Spend—TowerGroup, a leading financial services industry analyst firm, reports that technology spending for the OTC Derivatives market is expected to reach $1.07 billion by 2006.</p>
<p>• Trading Volume—The International Swaps and Dealers Association (ISDA) reports that the average number of weekly trades has risen from 1,975 in 2001 to 3,704 in 2004.</p>
<p>• Current Solution—ISDA members depend on home grown technology solutions or manual processes to settle complex trades, however, these solutions often fracture under the weight of increased trade volume and the complexity and variety of products being traded.</p>
<p>“The historic growth statistics of the BIS mask the fact that the growth rate is accelerating and the growth is occurring in increasingly complicated instruments. To put this market into context, the OTC derivatives notional value of $248 trillion dollars is more than 30 times the size of the US mutual fund market,” said Gavin Little-Gill, director, TowerGroup. “While the market has grown, it has struggled to integrate the automation necessary to maintain this growth. Many of the proprietary and niche solutions that characterise this market are creaking under the strains that this growth has created. As a result, institutions are looking for more robust third party applications from vendors with the capability to support continued development of those applications. Automation of contract management is top on the list of pain points for both buyers and sellers of these securities and central to efforts to manage the growth of this business. The combination of a market leader in the Enterprise Content Management market and a dominant OTC derivatives platform shows promise in providing a scalable solution to this market.”</p>
<p>Delivering Industry-Leading ECM Solutions for the Financial Services Market</p>
<p>Interwoven’s strategy is to deliver end-to-end ECM solutions designed to address specific business challenges across enterprises and within priority vertical markets such as financial services. Currently, Interwoven provides targeted solutions to capital markets, corporate banking and retail banking operations, with customers such as ABN Amro and Credit Suisse First Boston. With the addition of Scrittura’s impressive customer base—including AIG International, Bear Stearns, Royal Bank of Scotland, and Wachovia Bank—Interwoven now has as customers 19 of the top 25 financial services companies on the Financial Times 500 list.</p>
<p>“Interwoven is focused on bringing to market best-in-class ECM solutions that address specific business challenges across enterprises, and within vertical markets,” said Martin Brauns, chairman and CEO, Interwoven. “Interwoven’s acquisition of Scrittura not only reinforces this commitment, but adds to our already strong leadership role within the financial services industry. Building on the success Scrittura has already achieved in the OTC Derivatives market, we expect to continue strengthening our existing footprint in the financial services industry by providing additional high-value solutions in the coming months.”</p>
<p>Interwoven Delivers Industry’s First Complete OTC Derivatives Solution</p>
<p>Designed to enable financial services customers to more quickly and easily conduct complex non-exchange based trades with other financial institutions, the new Interwoven OTC Derivatives solution will provide complete functionality including: business process management; document management; records management; fax and paper capture; and messaging brokering. As a result, financial services customers are expected to be able to reduce the amount of time it takes them to complete a trade from days and weeks, to hours or even minutes.</p>
<p>“In the last 15 years, Scrittura has marked out a territory in the financial services technology market that no other vendor has been able to successfully enter,” said John Lewis, CEO, Scrittura. “The root of our success has been our specialist focus and responsiveness to the exacting demands of a very complex industry, and this focus will continue as we merge with Interwoven. As a result, we expect clients to be able to benefit from a powerful combination of market-leading technologies enabling them to take full advantage of the opportunities presented by the growing popularity of OTC trading.”</p>
<p>Availability</p>
<p>The Interwoven OTC Derivatives solution is available now. For more information, there will be a complimentary Webinar on Thursday, September 8, 2005 at 10am PT/1pm ET. To register, please visit: www.interwoven.com/otcwebinar</p>
<p>About Interwoven</p>
<p>Interwoven, Inc., provider of Enterprise Content Management solutions for business, enables organisations to unify people, content and processes to minimise business risk, accelerate time-to-value and sustain lower total cost of ownership. Interwoven delivers deep industry-specific solutions which reduce business process cycle time from initial collaboration through design, production, sales, marketing, legal review, IT and service. Interwoven leads the industry with a service-oriented architecture today and easy-to-use, best-in-class components and solutions. Today, over 3,300 enterprises, law firms and professional services organisations worldwide are Interwoven customers including BT, Ford, Freshfields Bruckhaus Deringer, General Motors, Jones Day, Motorola and Yamaha. Interwoven is headquartered in Sunnyvale, Calif., with offices around the world. For more information visit www.interwoven.com.</p>
<p>Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include Interwoven, Inc.'s estimates of the impact of Interwoven’s acquisition of Scrittura on Interwoven, Inc.’s revenue in the third an fourth quarters of 2005 of Interwoven, Inc. and the expected benefits of Interwoven, Inc.’s acquisition of Scrittura. Some of the factors which could cause Interwoven's actual results to differ materially from its expectations include the following: the risk that Interwoven will not successfully execute its product development or integration efforts related to Scrittura; the risk that Interwoven will not gain market acceptance of our products and services; customer acceptance of our enterprise content management solutions and new product releases may be slower than we anticipate; lengthening customer sales cycles; customer spending on enterprise content management initiatives may decline; our ability to cross-sell additional products into our installed base of customers; intense competition in our market which makes our results difficult to predict; development of certain Interwoven products and services may not proceed as planned; and the introduction of new products or services by competitors and the ongoing consolidation in our market place could delay or reduce sales. These and other risks and uncertainties associated with our business are described in our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q and Current Reports on Forms 8-K, which are on file with the Securities and Exchange Commission and available through www.sec.gov.</p>
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<p>Media Contacts:</p>
<p>Rob Stirling
Markom Marketing
+61 2 9977 8922
rob_stirling@markom.com.au</p>
<p>Andrew Antal
Interwoven
+61 2 9922 9700
aantal@interwoven.com</p>

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