Kofax acquired by international investment group

In a move that will likely expand Kofax's international presence, an investment group led by UK-based holding company DICOM Group will acquire Kofax Image Products.

Under the proposed deal, the investment group (consisting of Dresdner Kleinwort Benson Private Equity Partners, L.P.; DICOM Group, a holding company for European distributors of document imaging processing equipment; and members of Kofax's management team) will invest $21.3 million in addition to a bank-negotiated $60 million in debt financing, both to cover the transaction and for working capital. Part of that debt will be repaid from Kofax's existing cash balances, which stood at over $25.3 million as of March 31, 1999.

The announcement Wednesday pushed Kofax shares up nearly 33% to approximately $12.30 per share, nearly equal to the premium offered by the investment group.

The deal combines Kofax's expertise in core image processing technology and product development with the international sales and services knowledge of DICOM, which markets data and document management products in 16 European and four Asian countries. The two have partnered in the European market for over a decade.

"DICOM shares our vision of the future of the document technologies market and we believe this transaction will help us grow Kofax faster and on a more global scale," said David Silver, Kofax president and CEO.

"We have always been impressed with Kofax technology and expertise in document capture and image processing, as reflected by their impressive customer roster and strong brand name," said DICOM chairman Otto Schmid.

Although no plans exist to change the current Kofax entity, Schmid said DICOM will actively seek to "achieve broader market penetration" and increase marketshare to build "a leading global partnership for products and services to the document technologies market."

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