Vignette buys Sydney’s Tower Technology for $161M

Copper Australia - a new subsidiary of US enterprise internet applications vendor Vignette - has bought Sydney service provider Tower Technology for US$125 million ($161 million) in cash and shares.

Tower Technology's main investors, ASX-listed, Melbourne-based venture capital company Advent, signed the sale papers to Copper Australia today, Friday 23 January, for US$125 million.

However, although the total price is US$125 million - comprising US$45 million in cash and US$80 million in shares - Advent itself will only gross around US$56 million since its fully diluted interest in Tower's share capital is just 34 percent, after calculating for Tower staff options.

Daryl Reilly, one of three director-principals of Advent Management Group - which manages Advent Ltd - said the company was 'extremely pleased' with the sale price.
'We've been actively looking at Tower for the last couple of years, because it was very much a world-class company but there were issues associated with a decline in tech stocks - September 11 and so on - and that had major impacts on US merger and acquisition activity,' Reilly said.

Discussions with Vignette - which had formed Copper Australia specifically to take Tower Technology - had been underway for some months, he added.

Reilly said Advent specialises in communications, IT, manufacturing and business services capital. It first invested in Tower Technology in 1987.
'We have two active foci at the moment: Advent 3 private equity ... and Advent 4 private equity fund, which was recently created and is very actively investing as we speak,' he said.

Vignette had been in acquisition mode for some time and had recently bought several other companies, he added.

Tower Technology, which hit Australian headlines last year when it signed a deal to overhaul manual records management processing for 40,000 students and 3,000 staff at the Queensland University of Technology, is a large-scale document processing and records management service provider with offices worldwide.

A statement released by Advent said that Tower specialises in developing and deploying applications to capture, store, retrieve, process, archive and manage business information.

Vignette Australia was contacted for comment on the purchase but no one was available at the time of going to press.
 
However, US-based Vignette president Thomas E Hogan has claimed in a written statement that buying Tower Technology would make the content management company 'the industry's only combined suite of enterprise content management services and ... delivery services associated with our portal, integration and collaboration applications'.