Autonomy has won a $70 million (£35 million) order for Desktop Legal Hold, one of the products that came with last year's Zantaz acquisition.
The customer, not identified by Autonomy, is thought to be global bank Citigroup.
Autonomy bought Zantaz for $375 million in July, 2007. The company makes products for archiving, compliance and e-discovery. Desktop Legal Hold (DLH) enables customers to quickly identify, set aside and organise documents and emails pertinent to lawsuits.
It is thought that Citigroup bought DLH because of possible lawsuits it is facing from investors and others over the sub-prime mortgage lending crisis in the USA.
US federal rules specify relevant paper and electronic communications must be readied for court use in 99 days. Discovering them through non-automated means can be very expensive, as well as taking months longer, exposing companies to severe legal penalties.
The Citigroup deal is Autonomy's largest-ever order, with its average sale being less that half a million dollars. The order will be fulfilled over four years.
The banking industry has experienced turmoil because of sub-prime lending issues. Chuck Prince, Citigroup's CEO, recently resigned after the group reported an $11 billion loss related to sub-prime lending last year. Its competitor Merrill Lynch similarly wrote off $8 billion. Other banks such as HSBC, UBS, and Morgan Stanley have also reported sub-prime write-offs.
It is likely that deal would not have happened without Autonomy having purchased Zantaz. Citigroup was an Autonomy customer before the Zantaz acquisition and was involved with the purchase, giving it knowledge of Zantaz and its technology.
Autonomy gained some funds for the acquisition by selling 12.7 million shares placing through Citigroup and USB. In December Citigroup upgraded its rating of Autonomy shares from 'hold' to 'buy' because of Autonomy's sales prospects.
The prospects for sub-prime-affected banks to purchase DLH to better deal with possible lawsuits look good. Autonomy has in excess of 17,000 customers, among which are many banks: ABN AMRO; Deutsche Bank; and Lloyd TSB for example.
Autonomy could find that the return on its investment in Zantaz comes in rather more quickly that it anticipated, making it one of the very few winners from the sub-prime crisis.