In a move that alters the business dynamics of the library technology sector, ProQuest has announced that it will acquire Ex Libris in a deal expected to close in later in 2015. Ex Libris, under the ownership of Golden Gate Capital since November 2012, will become a wholly owned business of ProQuest. This merger significantly extends ProQuest’s offerings of technology-based workflow and resource management tools and places a broader portfolio of products under the responsibility of Ex Libris. While this merger represents a major step in the evolution of the industry, it is not anticipated to compromise the availability of current product offerings. Longer-term product strategies will be developed over time in collaboration with the company’s customer base.
Following the close, a new business group will be formed called Ex Libris, a ProQuest Company. This new entity will combine the portfolio of Ex Libris and the Workflow Solutions division of ProQuest and will be headed by current Ex Libris President and CEO Matti Shem Tov and a combined management team built from Ex Libris and ProQuest executives. Shem Tov will report to Kurt P. Sanford, CEO of ProQuest, who has led the company since July 2011. The workforce of both companies will continue intact in their current business locations and roles with their respective products. John “J. G.” Chirapruath appointed as senior vice president and general manager of ProQuest Workflow Solutions in June 2015 will continue in this role until the transaction is complete and will also immediately become the chief product and strategy officer for ProQuest reporting to Sanford.
Continuity of the Ex Libris strategy and management team forms one of the fundamental cornerstones of the acquisition agreement. The arrangement for Shem Tov to continue with Ex Libris under the ownership of ProQuest is not an interim arrangement, but a long-term commitment. Shem Tov and his executive management team have navigated Ex Libris through multiple ownership arrangements preserving key products and strategies. These continuing strategies, primarily based on aggressive research and development to create new technology products for libraries and other institutions, have proven successful as Ex Libris has seen impressive growth in terms of library customers, revenue, and personnel employed. Shem Tov has served as president and CEO of Ex Libris since March 2003.
Previous ownership arrangements for Ex Libris include:
- ProQuest (Beginning in 2015)
- Golden Gate Capital (November 2012 –2015)
- Leeds Equity Partners (August 2008 – November 2012)
- Francisco Partners (June 2006 – April 2008)
- Hebrew University of Jerusalem (1980–2006), Tamar Ventures, and Walden Israel (1999–2006)
The value of Ex Libris increased substantially through each phase of ownership. According to business reports published at the time, Francisco Partners purchased Ex Libris for $62 million in 2006. The value of the current transaction has not been disclosed.
Executives interviewed, including Sanford and Shem Tov, assert that the existing products of both companies will continue to be developed and supported according to previously established timelines and customer commitments. They position the merger as one that will continue to support the choices that libraries have made and with potential to strengthen all the products involved through the combined expertise and capacity of the two organizations. The slate of products under the merged business includes:
- 360 Link: link resolver and knowledge base product developed by Serials Solutions
- Aleph: The original integrated library system developed by Ex Libris in the mid-1980s
- Alma: library services platform released by Ex Libris in 2012 with initial development beginning in 2009
- bX Recommender: an article recommendation technology developed by Ex Libris
- campusM: mobile-oriented content management platform for academic institutions acquired by Ex Libris in April 2015
- Intota: library services platform in the development by ProQuest Workflow Solutions
- Intota Assessment: workflow tool developed by ProQuest to provide analytics and predictive business information to support more intelligent collection development
- Leganto: course list management system recently developed by Ex Libris
- Primo: discovery service initially released in 2006, with the Primo Central index
- Rosetta: digital preservation and asset management platform developed by Ex Libris
- SIPX: tool for the management of copyright and costs for digital course packs acquired by ProQuest in April 2015
- SFX: the context sensitive link resolver, acquired by Ghent University in 2000 and subsequently redeveloped and commercialized
- Summon: index-based discovery service launched by Serials Solutions in January 2009
- Voyager: Integrated library system originally developed by Endeavor Information Systems in the mid-1990s and acquired by Ex Libris in November 2006
According to both Sanford and Shem Tov, the merger of Ex Libris into ProQuest will not eliminate existing products. Ex Libris and ProQuest have both previously acquired companies and left their products intact even when duplicative of existing offerings. When Ex Libris acquired Endeavor, it developed Voyager even more aggressively than its previous owner, Elsevier. Voyager continues to be supported and developed and is used in some of the world’s largest libraries, including the Library of Congress and Cambridge University. In parallel to ongoing support of Voyager and its original Aleph ILS, Ex Libris developed Alma as an entirely new product, both as a long-term migration path for the libraries using those products and especially to attract new customers. ProQuest demonstrated a similar strategy with its ebook strategy, preserving the platforms of Ebrary, which it acquired in January 2011, and Ebook Library, acquired in June 2013, as it developed its new Ebook Central platform that combined the capabilities and business models of both products, which entered its beta test phase in June 2015.
There may be some scenarios where the joining of the companies may have the potential to enhance product offerings. Both Primo Central and Summon depend on central indexes, which may be mutually enhanced with content not previously addressed. Likewise the SFX and 360 Link may be improved through collaboration in the population of their respective knowledge bases.
It is important to note that at this time the acquisition has not closed and that product, personnel, and business strategies are still under review. More specific product roadmaps will be developed and announced in the coming months once the merger is finalized.
Creation of a library technology leader
This merger will form the largest entity in the library technology industry, though not as large as companies with broader business activities such as EBSCO, OCLC, or Gale. The two incumbent organizations at the end of 2014 employed 1,045 people, with 432 involved in some aspect of product development, according to figures provided for the annual Library Systems Report published by American Libraries. Once the acquisition of Ex Libris completes, ProQuest will have a workforce of approximately 1,800 employees across all its business units. The following table shows the personnel statistics of the two companies prior to the merger and the combined totals. Once the merger is completed and the organizations become integrated, the personnel counts may vary considerably form the totals shown.
|ProQuest Workflow Solutions||224||107||75||63||11||480|
|Ex Libris, A ProQuest Company||432||341||140||110||22||1,045|
Ex Libris was already the largest of the companies oriented primarily to the development of library software measured by personnel employed. Other large companies in this category include SirsiDynix, with 421 personnel, and Innovative with 416. OCLC reported total personnel of 1,315, including its many different products and services. EBSCO Information Services, a company with many similarities to ProQuest in terms of content and technology offerings, employs 2,982.
ProQuest is owned by Cambridge Information Group and with a minority investment by Goldman Sachs. Cambridge Information Group is owned Robert N. Snyder (founder), Andy Snyder (CEO), and their family.
ProQuest ranks as one of the major producers of content products, with a wide portfolio that includes databases and e-books. The company offers dozens of databases in the social sciences, science and technology, medicine, business, research, and many aggregations of news sources. ProQuest markets its content products to colleges and universities, public libraries, corporations, and K–12 schools. Its content brands also include CSA, Chadwyck-Healey, and SIRS. ProQuest traces its roots to publication of collections on microfilm and continues to offer newspapers, dissertations, primary works, and other materials on this medium.
In addition to these content products, ProQuest has created or acquired a variety of technology products that assist libraries in the acquisition and management of electronic and print resources. The acquisition of Ex Libris dramatically accelerates and expands ProQuest’s capacity in the support of libraries with workflow and resource management tools.
Smart Libraries Newsletter covered the new business strategy executed under the leadership of Kurt Sanford in March 2014: “ProQuest Unifies its Business, Drops Serials Solutions Brand.” This strategy created a more unified business from a variety of units that previously operated mostly independently. As part of this strategy, the company discontinued the Serials Solutions brand, a company it had owned since March 2004, folding all its products and activities into ProQuest Workflow Solutions.
[The following section is based on updated text of that article]
Cambridge Information Group
A large investment firm, Cambridge Information Group holds portfolio companies in diverse industries. In addition to its library-oriented companies, CIG also owns Sotheby’s Institute of Art, the Back to Rock school of music, and is a major investor in Navtech, which develops aircraft navigation products. CIG’s initial portfolio company was Cambridge Scientific Abstracts. Its investments expanded to include many other library-oriented companies. In 2001 CIG purchased R. R. Bowker from Reed Elsevier. Backed by CIG, Bowker subsequently acquired other companies including Syndetic Solutions and Medialab Solutions and its AquaBrowser Library discovery interface, both in 2007. CSA also expanded, including the acquisition of Community of Science in 2005. CIG supported the establishment of RefWorks in May 2001.
CIG acquired ProQuest in February 2007 in partnership with private equity firm ABRY as a minority investor. At this time ProQuest was merged with CIG’s CSA subsidiary to form ProQuest-CSA, subsequently named ProQuest in May 2007. Marty Kahn was appointed CEO.
Following the acquisition of ProQuest, many of CIG library-related assets were organized under ProQuest, including Bowker and its subsidiaries. During this period, ProQuest made a number of strategic acquisitions, including purchasing Dialog from Thomson Reuters in July 2008.
In November 2013 ABRY divested its stake in the company with Goldman Sachs stepping in as a new minority investor.
ProQuest traces its corporate history to a company formed by Eugene B. Power in 1938 called University Microfilm International based in Ann Arbor, Michigan. Based on the experience gained with its original product of doctoral dissertations, the company expanded into abstracts of scholarly articles and other types of content. Ownership of the University Microfilm International changed hands in 1962, when it was acquired by Xerox, and again in 1985, when Bell & Howell purchased the company. Bell & Howell Information and Learning expanded through a series of strategic acquisitions and through the creation of new product lines.
The company launched its flagship ProQuest series of products in 1995, originally distributed on CD-ROM, and in 1997, via the internet though ProQuest Direct. The success of the brand led to the use its name when Bell & Howell Information and Learning and Bell & Howell Publishing Services merged in 2001, forming the ProQuest Company.
In 1999 Bell & Howell acquired Chadwyck-Healey in a deal valued at £30 million. Other acquisitions made in this period included the Canadian company Macromedia in 2002, which published a variety of products on CD-ROM and in print. In June 2003 ProQuest acquired SIRS Publishing, which had developed a variety of information products oriented primarily to K–12 school libraries, from Elliot and Eleanor Goldstein.
In March 2004 ProQuest acquired Serials Solutions from its founders. The products of Serials Solutions, oriented primarily to the management and access of electronic resources, came to form the basis of the ProQuest Workflow Solutions division.
Serials Solutions was founded in May 2000 by Peter McCracken, Mike McCracken, Steve McCracken, and Chris Pierard. The company was acquired by ProQuest Information and Learning in March 2004. In June 2005 Jane Burke was named vice president of ProQuest and general manager of Serials Solutions. Burke is a veteran of the library automation industry, having held executive positions in CLSI, NOTIS Systems, Ameritech Library Services, and Endeavor Information Systems. Burke continues her involvement at ProQuest as a Vice President, Market Development. Through the acquisition of Ex Libris, Burke is once more involved with Voyager, the product developed under her leadership by Endeavor Information Systems.
ProQuest acquired Coutts and its MyiLibrary digital content platform and Online Acquisitions and Selection Information System (OASIS) from Ingram Content Group in June 2015. Details of this acquisition were covered in the June 2015 issue of Smart Libraries Newsletter.
ProQuest acquired Ebrary in January 2011 from its cofounders Kevin Sayer and Christopher Warnock. In January 2013 ProQuest acquired the Australian company Ebook Library. The company’s new Ebook Central is under development as its new strategic platform for the management and access of ebooks.
[The following section is based on the profile of Ex Libris originally published in the January 2013 issue of SLN]
Ex Libris’ Corporate and Investment History
Ex Libris traces its roots to efforts to create automation software for the libraries of Hebrew University of Jerusalem, beginning in 1980. The Automated Library Expandable Program, or ALEPH-100, system soon attracted interest by other universities. Yissum, the technology transfer unit of the University, facilitated the formation of a new company called Aleph Yissum to further develop and commercialize the software. Azriel Morag, an Israeli businessman with experience in the software industry, was recruited to lead the company. In 1986, another company was formed, Ex Libris, Ltd., to market the software outside of Israel, with Morag as its principal owner. Aleph Yissum and Ex Libris, Ltd. were merged in 1995 and shortly reorganized under the name Ex Libris Group. In July 1997, Ex Libris acquired a German company Dabis and its BIS automation product used by around 300 academic libraries.
In 1999, two Israel-based venture capital firms, Walden Israel and Tamar Ventures, made a combined $4 million investment in Ex Libris. The injection funded the company’s entry into the United States and commercialization of the SFX linking technology, which it acquired from Ghent University. At this point, Morag and other company executives, Hebrew University of Jerusalem (30%), Walden Israel (20%), and Tamar Ventures (20%), shared ownership of the company. In addition to SFX, the company created a variety of other products to support academic libraries, such as the MetaLib federated search tool, Verde electronic resource management system, and DigiTool digital collections platform.
Beginning in 2005, Ex Libris Group began exploring other investment opportunities. In September 2005, the company attempted an initial public offering on the AIM (Alternative Investment Market) of the London Stock Exchange. At this point, Morag retired from Ex Libris, selling his ownership stake to the other investors. The IPO failed to generate the anticipated capital and was withdrawn.
Francisco Partners, a San Francisco-based private equity firm, acquired Ex Libris Group in June 2006 for $62 million, marking a major transformation of the academic library automation sector. In a subsequent transaction in November 2006, Ex Libris, with support from Francisco Partners, also acquired Endeavor Information Systems from Elsevier. This merged company went forward with two flagship ILS products, Aleph and Voyager, continuing ongoing development, marketing, and support for both. One of the key strategic products created during this period was Primo, positioned as a discovery and delivery interface for academic libraries, which could be used not only with both Aleph and Voyager, but with the ILS products from competing companies. The company also invested in the development of Rosetta, a new digital preservation platform created in partnership with the National Library of New Zealand going to general release in January 2009.
Francisco Partners held on to this investment for just past two years, selling Ex Libris Group to Leeds Equity Partners in August 2008 for an estimated $150 million. Shortly after the acquisition by Leeds, the company began the development of a new Unified Resource Management product, subsequently branded as Alma. As a new library services platform built from the ground up, Alma represented a significant research and development project. Offering a forward migration path for existing customers using and Voyager, Alma also held potential for attracting new library customers using ILS products from competing companies.
Golden Gate Capital acquired Ex Libris from Leeds Equity Partners in August 2013. During the period of its ownership by Golden Gate, Ex Libris entered a phase of sales and implementation of Alma, reaping the rewards of the investment made in the product’s development. New products developed include the bX Recommendation Service and the Leganto course list management solution. Ex Libris expanded its involvement into the campus mobile technology arena with its acquisition of oMbiel and its campusM mobile-oriented SaaS platform.