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WATERLOO, Ontario - OpenText Corporation (NASDAQ:OTEX) (TSX:OTEX), a technology company with a market capitalization of $9.4 billion and trading near its 52-week high of $39.04, announced Thursday it has reached a definitive agreement to sell its eDOCS solution to NetDocuments for $163 million in cash, according to a press release statement.
The divested business, part of OpenText’s Analytics product group, focuses on automating work for legal professionals and generated approximately $30 million in annual revenue during OpenText’s fiscal year ended June 30, 2025. The company plans to use the proceeds to reduce its outstanding debt. According to InvestingPro data, OpenText maintains impressive gross profit margins of 75.9%, though its current ratio of 0.8 suggests careful debt management is prudent.
The transaction involves the transfer of software, customer contracts, associated services, and employees to NetDocuments. The deal is expected to close by early 2026, subject to customary approvals and closing conditions.
"This divestiture further enables our continued focus on growing our core business centered on secure information management for AI," said Tom Jenkins, OpenText Executive Chairman of the Board and Chief Strategy Officer. The company’s strategic shift appears to be paying off, with InvestingPro data showing a strong 47.69% price return over the past six months. For deeper insights into OpenText’s strategic positioning and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
James McGourlay, OpenText Interim Chief Executive Officer, added that NetDocuments "will be a great partner for the users of the eDOCS solution," and that OpenText intends to work closely with them to ensure a smooth transition.
The divestiture aligns with OpenText’s previously announced strategy of divesting non-core businesses to focus on its core operations. Goldman Sachs & Co. LLC is serving as financial advisor to OpenText for this transaction.
In other recent news, OpenText Corporation has announced the appointment of Steve Rai as the new Executive Vice President and Chief Financial Officer, effective October 6, 2025. Rai brings extensive experience, having previously served as CFO at BlackBerry Limited. OpenText and Fiserv have also launched Content Next, an AI-powered content management solution aimed at enhancing operational efficiency for financial institutions. This new platform is designed to automate content workflows, thereby reducing manual efforts and improving governance.
Additionally, OpenText has received multiple upgrades from financial institutions. Scotiabank upgraded OpenText’s stock from Sector Perform to Sector Outperform, citing the strength of its Content Management business, which accounts for about 40% of the company’s revenue. National Bank Financial also upgraded the stock to Outperform following strategic discussions with the company’s leadership. Meanwhile, RBC Capital raised its price target for OpenText to $35, maintaining a Sector Perform rating, reflecting expectations of an upward valuation re-rating for the company. These developments highlight growing confidence in OpenText’s strategic direction and financial performance.
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