Microsoft Corp.(MSFT) has reportedly signed a letter of intent to purchase Israel-based text analysis tool maker Equivio Ltd.
According to The Wall street journal, the deal, which has not been confirmed by either party, could cost Microsoft around $200 million.
Equivio and Microsoft’s relationship dates back to 2006. Equivio has been working with Microsoft Technologies, which includes the likes of Windows XP, SQL Server and SharePoint Serve.
The Israel-based company fabricates text-analytics products which are used for legal and compliance e-discovery tasks. Its core product is Zoom – "a court-approved machine learning platform for the legal area". Zoom uses machine learning algorithms that simplify samples of texts marked as appropriate to the issue at hand, to apply the sorting logic to groups of texts, such as legal documentation.
According to Equivio's website, the firm boasts patrons like the U.S. Department of Justice, the Federal Trade Commission, KPMG and Deloitte. Equivio has an impressive network of more than 80 e-discovery service providers.
Microsoft is known for its work in machine learning, governance and intra-company document search. Equivio’s acquisition is deemed a good fit for the software technology giant.
The acquisition could also help Microsoft use a portion of the cash it is holding overseas.
Microsoft currently has a Zacks Rank #2 (Buy).
Other Stocks that Warrant a Look
Some other well-placed stocks in the industry are Aspen Tech Inc. (AZPN), Park City Group Inc. (PCYG) and PTC Inc. (PTC), all of which sport a Zacks Rank #1 (Strong Buy).
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