Bitstream announced today that it was acquiring the assets of Press-Sense, which was under the jurisdiction of an Israeli court due to some Press-Sense investors pulling out. My personal bet had been on HP, which seemed to have the most integrated relationship with Press-Sense when compared to other OEMs.

I spoke with Anna Magliocco-Chagnon, Bitstream President and CEO, currently in Israel, shortly after the announcement.  She indicated that before signing on the dotted line,  Bitstream, the parent company of PageFlex, had contacted key OEMs, such as HP, Xerox and Oce, to ask what they thought about Bitstream acquiring the company.  "All three were very enthusiastic that we were doing this," she said. "That's why they were quoted in the press release.  I think a lot of people put their name in the ring so others wouldn't buy it.  But all of the players were happy to embrace us."

Magliocco-Chagnon went on to say that there was very little overlap between the customers of the two companies, and that this also provides an opportunity for Bitstream to expand its international footprint as well as get into the OEM channel game, where PageFlex hasn't really played before.

"What really set us apart, though, in the eyes of the court," she added, "was our commitment not only to the technology but to the people.  We were told that our offer retained the most employees, and that was important in the decision.  Our commitment was just as much to the people as to the technology, because they are vital to the business going forward and vital to all that we do.  We will continue with the product plans and combine them with our own, and we needed the people to be able to do that in the best way possible."

Magliocco-Chagnon also commented that she plans to invest in further development of SaaS solutions, where PageFlex and Press-Sense have somewhat limited offerings, although she does not see that as the be-all, end-all, saying, "A lot of what Press-Sense does in terms of workflow automation with big customers--we don't see them adopting SaaS."

There are still some steps before the deal will close, and the court has given Bitstream until the end of May to wrap these up.  One item is approval from the Office of the Chief Scientist, which granted some funding to Press-Sense, and that is expected to come quickly now that the court has approved the deal.  She added, "We also needed some time for the mechanics of actually employing the people.  We did not assume any of their operational contract in order to give us the ability to renegotiate, and the court has given us till the end of the month to work on that."

Looking ahead, Maglicco-Chagnon believes that each company has its own strengths, with PageFlex having a stronger front end in the document creation, composition and publishing area, as well as VDP, with Press-Sense having a stronger back end with its workflow and MIS solutions.  "The part in the middle, the storefront, is not where the value is anyway," she said. "Everyone comes to market with a storefront.  There are so many strengths on either side independent of each other, and our vision is to combine them to capitalize on those strengths."

Maglicco-Chagnon concluded, "We are very excited about this.  It is a big win for our company.  Actually, we were kind of surprised at the outcome given the players that were interested.  We believe in the people; we believe in the product that has been developed to date; and we plan to take it to the next level with our combined technology, people and expertise. It is just the beginning and we are excited about where it is going to take us."