In March, Lexmark International announced its third major technology company acquisition since mid-2010. The Lexington-based company paid $148 million for Brainware, which markets software that automatically extracts data from documents such as invoices and sends it to other software systems.
Carl Mergele, chief executive of Brainware, visited Lexington last week and spoke with the Herald-Leader about the company's new role inside Lexmark's Perceptive Software unit and how its technology works. This is an edited transcript of the conversation.
Question: Tell me about Brainware's software and how it fits in with Lexmark's expanding software offerings.
Answer: Brainware is a little different than the others. It's a true adjunct to Lexmark. If you think about Lexmark today, they're a dominant player in that hardware front-end component. If you think about Perceptive Software, they're selling a back-end enterprise content management component. Brainware is the glue that holds that together.
We take the images being picked up off that device, lift the data and put it in the back-end system ... .
What Brainware fundamentally does is automate manual processes. Whether it's an accounts payable environment or maybe bills of lading or explanations of benefits, we're able to lift that data off of those documents and put them into back-end systems without any human involvement.
Q: What are your goals as you work with Lexmark?
A: I'm very excited about what the opportunity is with Lexmark. They have world-class customers and they're right in our sweet spot. We've been fortunate as a small company to sell to the largest companies in the world. If you look at the slate of customers Lexmark has, they're world-class as well.
Maybe a good example is the financial world. Lexmark is very big in branched banking. Within these branches, the workers have to do yeoman's work taking signature cards, mortgage applications ... but our tool can do that in an automated way.
What makes us so different is this was built from the ground up by scientists. We literally have a plethora of patents that are now part of the Lexmark family.
The way it works is we show it a few examples, and it's able to begin processing. We got a call recently from Philip Morris International, and they said they now have Lithuanian invoices that they have to process. We said to send us a copy of the document, tell us what they are in English and circle what data fields you want and then send us one uncircled.
They now process Lithuanian invoices. It literally took one example.
Q: What made Lexmark an attractive purchaser of Brainware?
A: They had a vision that hardware and software are inexplicably tied for success. It really does take both pieces. We're nothing without the image.
And the beauty of this Brainware piece is we can be part of a much larger platform. I've been very impressed with the way Lexmark has conducted business. I love their motto of "customers for life." We ascribe to the same thing, and our technology is designed to be in there for life.
They're also a group that has a strong engineering focus and are willing to dedicate the resources to grow and expand Brainware. I think we can promulgate this technology around the world.
At the same time, there's a level of independence around this. Brainware will be able to serve the Lexmark family and serve customers outside it. We can become the de facto standard in the industry ... and we'll be able to have ongoing conversations with Lexmark competitors as well.
Q: What fears do you have and how do you plan on alleviating them about integrating into such a vastly larger organization?
A: Absolutely none. I've bought and sold many companies in my career because I happen to be a lawyer by training. Invariably, you'll have these little things pop up that you couldn't anticipate. This, though, couldn't have gone smoother.