Content management software

Storage giant EMC said Wednesday that it expects to close out its $1.7 billion acquisition of content management software specialist Documentum next week. The two companies were able to accelerate their proposed merger, which was announced in mid-October, because the necessary regulatory approvals were completed quickly, EMC representatives said. The acquisition was originally slated to close early in 2004, and remains dependent on a shareholder vote for official recognition. EMC said it now expects to finish the transaction after that vote is held on Thursday, Dec. 18. Under the terms of the deal, Hopkinton, Mass.-based EMC is offering 2.18 shares of its stock for each share of Documentum. ***

Documentum (Nasdaq: DCTM) rose 20 percent Friday after reaffirming financial guidance for 2001 after Thursday's bell. Shares in the provider of content management software were up 8.38 to 48.5 on the news, in spite of a downgrade from Morgan Stanley Dean Witter which said the company would face tough times due to the slow-down in IT spending. The company said it was confortable with the Street's revenue consensus of $57.7 million for its first quarter. It also reaffirmed guidance for 50 percent revenue growth, an operating income of 15 percent as a percentage of total revenue for Q4 2001, and plans for doubling the quota-assigned sales personnel by the end of 2001. "Talk of a global recession has us carefully watching our customer demand, but so far our discussions ... confirm that e-commerce and content management initiatives remain high priorities for their IT spending in 2001," said CEO Jeff Miller in a release. ***

Documentum Inc. (Nasdaq: DCTM) soared 23 percent Friday after it reported earnings of a penny a share in its fourth quarter and analysts upgraded the stock. First Call expected a loss of a penny a share. Shares in the maker of the software-maker for content management were up 13 3/8 to 70 5/8. The stock has been rising slowly, though it dipped when one of its executives left last spring. Credit Suisse First Boston upgraded the stock from "hold" to "buy," and set a $75 price target on the stock, citing the company's addition of 81 new customers and seven license deals in the quarter. Morgan Stanley Dean Witter raised the stock from "neutral" to "outperform." Revenue for the fourth quarter was $41 million, up 12.6 percent over the $36.4 million for the same period of 1998 and up 21.3 percent over the third quarter. The company took one-time charges of $34.6 million related to the July 16, 1998 acquisition of Relevance Technologies, Inc. ***