Excalibur Makes a ConQuest
San Diego-based Excalibur shells out $33 million for a Columbia Md., start-up. The two could rule the infobahn roost in the growing market for information search and retrieval technology
In an attempt to dominate the fast-developing information retrieval market, Excalibur Technologies Inc. has paid $33 million for ConQuest Software Inc., a provider of advanced text management software based in Columbia, Md. San-Diego, Calif.-based Excalibur will issue 1.4 million shares of restricted common stock and 570,000 stock options to ConQuest shareholders in exchange for their ConQuest stock.
The merger brings together a combination of search and retrieval technologies, market coverage and management teams positioned to serve the rapidly growing markets for online and Internet publishing, document management, and business and government intelligence. With the integration of both companies' technologies, the market can expect a comprehensive package of powerful technologies for sorting through text, image and perhaps eventually audio clips.
Carl Frappaolo, executive vice president of Delphi Consulting Group, says the market for information retrieval is growing 30 percent annually. "This type of technology is in demand right now because more and more organizations are finding a need for electronic documents," explains Frappaolo. "The substantial use of the World Wide Web serves as an intelligent retrieval tool for electronic resources." But the accumulation of digital data, spread across increasingly disparate yet connected servers and databases, has far outstripped the technology of information search and retrieval. So private and public sector organizations are lacking the retrieval tools for their electronic search needs. Herein lies the business opportunity for Excalibur and ConQuest.
Accordingly, ConQuest offers a text retrieval system on a semantic network where a user is able to search large text databases. The software provides searches for online news feeds and Internet publishing. Excalibur's software is pattern-recognition based; it allows the user to manage and retrieve digital information including text and images. One of the objectives of the merger is to integrate the two technologies to provide users with an advanced set of information retrieval tools, as companies are increasingly finding that no one search method is sufficient. This trend is also likely to drive continued consolidation in the information search and retrieval market. "I believe with the integration of both (Excalibur's and ConQuest's) of our strengths, we will create the new generation of retrieval technology," says Mike Kennedy, CEO of the newly formed Excalibur.
Kennedy will serve as CEO of the combined companies. Edwin Addison, president and CEO of ConQuest, will assume the post of executive vice president and serve as a member of the Excalibur board of directors. ConQuest will remain in the area and retain its 35 employees. With the acquisition, which adds just under $2 million in annual revenues, Excalibur is expected to move from No. 8 to No. 6 in its market, which includes competitors such as Dataware Technologies Inc., Verity Inc. and others. Even though the merging companies are retaining the Excalibur name, ConQuest will retain its product brand names.