Open Text buys cloud B2B integrator GXS in $1.17 billion deal

GXS' trading platform connects more than 550,000 companies

Open Text is acquiring GXS Group for US$1.17 billion in a deal that will give the information management software vendor a widely used cloud-based business-to-business trading platform.

The deal is expected to close within 90 days, according to Open Text's announcement on Tuesday.

GXS sells Trading Grid, which "eliminates the ongoing complexities and costs of do-it-yourself B2B integration," according to a statement. Some 550,000 trading partners are linked to GXS' platform.

The company has 2,900 employees with an installed base that includes half of the Fortune 1000, Open Text CEO Mark Barrenechea said during a conference call Tuesday. GXS had US$487.5 million in revenue during its fiscal 2012, according to a statement.

Without services like Trading Grid, "orders would stop, shipments would get lost, invoices would get unpaid," Barrenechea said.

Apart from GXS' software, acquiring the company will give Open Text more expertise in managed hosting and also provide an opportunity to cross-sell products into each company's installed base, he added.

The combined company will have more than 80,000 customers, according to a statement.

GXS' competitors include Ariba, which was acquired last year by SAP for $4.3 billion.

While Open Text lacks the core ERP (enterprise resource planning) software SAP is known for, the purchase of GXS will add to its ability to help companies exchange commerce-related information.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Tags business issuesInternet-based applications and servicese-commerceapplicationsBusiness Process Managementcontent managementsoftwareOpen Textcloud computinginternetMergers and acquisitions

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