OpenText Divests Legacy eDOCS to NetDocuments

Open Text Corporation announced that it has successfully completed the divestiture of an on-premises solution, eDOCS, a part of its Analytics portfolio, to NetDocuments Software, Inc., for USD 163 million in cash before taxes, fees, and other adjustments.

"The closing of this transaction reinforces our strategic commitment to divest non-core assets as we continue to sharpen our focus on growing our core business to accelerate long-term value creation," said Tom Jenkins, OpenText Executive Chairman of the Board and Chief Strategy Officer.

It is reported that NetDocuments has paid cash for OpenText’s eDOCS product, which generated US$30 million in revenue last fiscal year; therefore, the acquisition is >5x revenue. 

Our analysis revealed that typical revenue multiples for legacy software are circa 2% of revenue or 5x EBITDA. OpenText intends to use the net proceeds from the divestiture to reduce outstanding debt.

NetDocuments acquired Worldox in October 2022 and will have additional legacy software to manage and clients to transition to its SaaS solution.