Features

AUSTIN, Texas — After months of painful cost cutting, Vignette Corp. has splurged. 

The software company is dipping into its $335 million cash reserves to buy a company, something it hasn’t done since the tech bubble burst in early 2000. 

Vignette is paying $32 million, mostly in cash, to buy San Francisco-based software maker Epicentric Inc. 

Epicentric is the first, but probably not the last, acquisition arranged by new Vignette chief executive Tom Hogan, who has been interested in putting Vignette’s cash to work. 

“Cash is king in this environment,” Hogan told analysts earlier this month. 

It’s a good time to go shopping. Tech companies struggling with low sales are easy prey for those that have cash to spare. 

Analysts say Epicentric is a good technology fit. But in a research note, Salomon Smith Barney analyst Heather Bellini, who is keeping her “underperform” rating for Vignette, said the move would not help the company reach its goal of breaking even any faster. 

Epicentric, which makes business portal software, raised more than $85 million in venture capital and now has about 265 employees, down from more than 330 in 2001. Earlier this year, Epicentric considered going public but decided against it. 

The acquisition, expected to close in December, involves $26 million in cash up front from Vignette and another $6 million coming if Epicentric employees stay with the company.