Canadian Software Company to Acquire Covisint

Canadian software company OpenText Corp. has agreed to buy Covisint Corp., the Southfield, Mich.-based provider of cloud-based secure intranets, for US$103 million.

OpenText will pay $2.45 per outstanding share of common stock, a 23% premium over Covisint’s share price on June 2. The companies expect to complete the acquisition in the third quarter of 2017.

Covisint was created in 2000 as a $500 million venture backed by General Motors, Ford, Chrysler, Nissan, Renault and Peugeot as an online marketplace for automotive suppliers to bid on contracts with carmakers. Developers predicted the value of the business would soar to $60 billion.

But suppliers were reluctant to participate in the global bidding wars encouraged by Covisint’s carmaker-centric platform. The company’s original business model quickly collapsed, and Covisint was acquired for a mere $7 million by Compuware Corp. in 2004. The business was spun off nine years later in an initial public offering.

Along the way, Covisint shifted its focus to providing secure intranet messaging and supply chain management platforms for the agricultural, energy, manufacturing, medical and packaged goods industries. More recently the company has promoted its Internet of Things platform.