FileNet Announces Agreement to Acquire Yaletown Technology Group

FileNet Corporation (Nasdaq: FILE), the leading provider of Enterprise Content and Business Process Management solutions, today announced that they have entered into an agreement to acquire Yaletown Technology Group, Inc., a leading provider of content compliance software. This acquisition is expected to provide FileNet with additional technology and expertise to address the compliance market, and will increase the breadth of capability delivered by FileNets industry-leading Records Manager and Email Manager product suites.

Acquiring Yaletown Technology Group is a natural extension for FileNet as we continue to expand our offerings to help customers meet the growing needs of regulatory compliance, said Lee Roberts, CEO and chairman of FileNet. "As much as 80 percent of a company's content assets remain unmanaged and uncontrolled by electronic records management systems presenting potential business risk to large regulated corporations. We believe the integration of Yaletown Technology Group's compliance oriented technologies into the FileNet P8 ECM platform can further accelerate our leadership in this growing market."

As a result of the acquisition, FileNet will complement its Records Management product with Yaletowns Records Crawler product. Working in conjunction with FileNet P8s Records Manager and Email Manager suites, Records Crawler for FileNet can scan Microsoft File Servers at high speed to examine documents a user creates and automatically declare only those documents as records that meet pre-set business rules. Records Crawler is designed to draw on the rules established in FileNets Records Managers File Plan which companies carefully design as part of their compliance strategy.

Additionally, the acquisition strengthens FileNets ability to enhance and support its existing email management product capabilities now and into the future. FileNet and Yaletown Technology Group have been marketing an integrated email management offering through an OEM relationship, offering customers email management capabilities integrated with FileNet Records Manager and Content Manager repository.

One of the top technology challenges of the utilities industry today is managing the vast amount of both electronic and paper records for government regulation, said Warren McKay, chief technology officer of BC Hydro a common FileNet and Yaletown Technology Group customer. From my perspective, the combination of FileNet and Yaletown Technology Group's records management technology is a natural fit which allows us to further automate our records and email management policies. BC Hydro's goal in automating our compliance processes is to more quickly respond to our business environment, and to help employees be more productive in their business areas by reducing the time needed in manually processing records to achieve compliance. I am delighted FileNet is acquiring Yaletown and expanding its development operations in Vancouver.

The purchase of Yaletown Technology Group is an all cash transaction valued at approximately $11 million net of cash for all of the stock in the company. The transaction is expected to close in early October, subject to customary closing conditions. The transaction is expected to be immaterial to FileNets results for 2005.

Based in Vancouver, Canada, Yaletown Technology Group is a privately owned corporation that specializes in delivering critical content compliance solutions to some of the world's largest companies. Yaletown Technology Group has a total employee base of approximately 40. The majority of these employees are in development, sales and professional services and are expected to be retained as FileNet employees.