After confirming last month it is on track for 14% organic growth in FY11 (see here), document imaging software company Kofax is now pushing ahead with acquisitive growth plans, with the takeover of Atalasoft, a developer and marketer of imaging software development toolkits. Kofax will pay a potential total of $9.7m in cash over the next two and half years, or a premium of up to 2.6 times Atalasoft’s FY10 revenue (ended 31 December) of $3.6m. Atalasoft made an EBITA profit of $1m in FY10, and had assets of $2.5m.
US-based Atalasoft employs 20 people who develop and sell DotImage, a software development toolkit for document scanning, viewing, annotating and processing in Microsoft .NET. Its customers include over 2,500 end users who license DotImage for internal software development, and system integrators and independent software vendors (ISVs) who use it to develop proprietary applications that they then resell to end users.
Kofax said the deal should close in May. It then plans to enhance DotImage and offer it for use with its own ‘capture and transformation’ software by the end of 2011. Kofax already has eyes on where DotImage will benefit its business process services clients, citing its use in the mortgage applications process for scanning and submitting web-based documents electronically, and eliminating the need to send through paper forms. This all sounds promising, but surely there are identity and security (not to mention regulatory) issues here that still need addressing before the entire mortgage application process can be done electronically.