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FileNet Uses Stock, Cash to Buy Two Companies for $111 Million

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SPECIAL TO THE TIMES

FileNet Corp. continued its buying spree Thursday and said it expects to report record results for 1995.

FileNet, which makes document-processing software systems, said Thursday it has signed an agreement to buy Saros Corp., a software company near Seattle, for stock valued at about $101 million. The Costa Mesa-based company also announced it will buy International Financial Systems Ltd., a software developer in New York, for about $10 million cash. The International Financial transaction should be completed by the end of the month.

In July, FileNet bought Watermark Software Inc. in Massachusetts for $65 million worth of stock.

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The Saros acquisition, which is subject to the approval of Saros shareholders and regulators, is expected to be completed in April, FileNet said. No vote of FileNet shareholders is required.

Privately held Saros, based in Bellevue, Wash., would operate as a unit of FileNet.

FileNet said net income and revenue should set records for both the year and fourth quarter of 1995. The company said its 1995 income should reach $19.8 million, although extraordinary charges related to the Watermark acquisition and other factors could reduce the net income to $14.8 million. The company earned $13.3 million, or $1.02 a share, the previous year. Revenue was estimated at about $215.5 million, a 22% jump from 1994.

The company also said fourth-quarter net income surged to an estimated $8.3 million from $5.1 million a year ago, with revenue climbing 22% to $53.5 million.

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The company expects to release final results next month.

FileNet’s stock jumped $2 Thursday, closing at $48.125 in Nasdaq trading.

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