Ovid Technologies, Inc. (http://www.ovid.com), a medium-sized, robust traditional search service, has sold a majority stake of its outstanding shares to Wolters Kluwer USA. Ovid will remain a stand-alone company, maintaining existing management, within the Wolters Kluwer International Healthcare Division, and it will continue to partner with other information providers in medical scientific markets. The new ownership should expand the content access for Ovid as well as enhance its resources, but there are no plans to confine Ovid's software to internal use by Wolters Kluwer.
Ovid provides a full range of database services to primarily medical and scientific markets. It offers the Ovid search software and bundles the technology with full-text journals and bibliographic databases. The Ovid software has particular strength in linking between and within documents, allowing users to jump from citations to full text, for example. The company offers multiple platforms for its 90 databases, pay-per-use or subscription access to a dial-up service that is also available on the Web, licensed tapes with or without software, CD-ROMs, support for networks and client/server structures, etc. Its market includes over 30,000 licensed users from over 5,000 institutions around the world, including private and public universities, library consortia, pharmaceutical firms, and government agencies.
Wolters Kluwer (http://www.wolters-kluwer.com), a multinational publishing company with some 15,000 employees active in 26 countries, plans to apply Ovid's technology to the electronic publication of over 900 journals from its medical/scientific publishing companies, making them fully searchable and navigable and linking them to both bibliographic databases and to journals of other publishers already in the Ovid system. Besides medical and scientific publishing such as Adis International's pharmaceutical publications, Wolters Kluwer USA also operates legal and tax publishing (CCH is one subsidiary), business publishing, and educational/professional training publications.
Wolters Kluwer paid $24.59 per share for public shares in Ovid Technologies, a publicly traded company on NASDAQ (OVID). The total acquisition price was approximately $200 million in cash. Ovid's annual sales in 1997, reported pro forma, amounted to $37.4 million with sales reported for the first half of 1998 at $21.8 million. The company has almost 200 full-time employees with offices in Salt Lake City; London, England; and Sydney, Australia. The main office is in New York City.
Mark Nelson, president, founder, and chief executive officer of Ovid, and several other major shareholders currently own some 5.1 million shares of Ovid or 63 percent of the outstanding shares on a fully diluted basis. Nelson personally owns around 50 percent of the company he founded in 1988 as Online Research Systems. The company's name was later changed to CD Plus, and then finally to Ovid, after its Ovid software. In 1994, Ovid acquired BRS Online. At this point, Ovid has completely "Webbed" its offerings. In fact Web access represents "the fastest growing part of the business," according to Nelson.
Nelson told us that he considers the acquisition "strategically, a great fit. In our marketplace of academic and STM content, Wolters Kluwer makes a nice match. It will give us lots of leverage we never had before to do what we want done." Nelson commented that Wolters Kluwer runs its subsidiary companies very autonomously. In fact, Wolters Kluwer USA has only six people at the top. They expect companies to run themselves without a lot of politics, according to Nelson, who still considers Ovid his "baby."
Nelson sees the value Ovid offers Wolters Kluwer as lying in two areas: Ovid's ability to continue to compete in its core markets, and its push into the area of clinical information products. "We know what users want," he said. "We're close to the user side of the supply chain."
Wolters Kluwer does not just look upon Ovid as a distribution channel, according to Nelson. "We bring more value added than distribution. We've told them that we're very close to the user. We know what they do. We know what they need. This knowledge should be valuable to a publisher of information. We're more likely to collaborate with them and other publishers of print and electronic journals. Our perspective is to let users' needs drive development and the value added."
Nelson clearly wanted Ovid's new ownership to open up opportunities to reach new content, without threatening or shutting down any current relationships with other publishers. He plans on maintaining a policy for "keeping a level playing field on what we offer." Users' needs and wants should define what Ovid offers.
Nelson told us that Wolters Kluwer is "committed to keeping current management in place. They see us as a great company." He expects no downsizing. "If anything, we may be upsizing," he said.