Content management company Vignette has signed a definitive agreement to purchase Epicentric, a leading business portal vendor, as both markets continue to shrink.

Vignette said that the deal would accelerate delivery of its vision to enable the real-time enterprise with its new generation of web applications unveiled at last week's Vignette Village 2002 user conference, when Vignette version 7 was also released.

In the deal, expected to close in December, Vignette will pay $32m (£20.5m) in cash and restricted stock for Epicentric, a privately held company.

Chris Harris-Jones, Ovum principal analyst, expressed surprise at the news. "I am not convinced this [purchase] will turn around Vignette's fortunes, although it will enable the company to add some bells and whistles to its software a little quicker," he said.

Unlike the document management market, which has been showing considerable growth, both content management and standalone portal markets are experiencing huge consolidation, Harris-Jones added.

But Vignette said that the combination of the two companies would create "the first and only major enterprise web applications company in the industry", which would turn real-time information delivery into a competitive advantage for companies using the software.

Harris-Jones said there was no obvious cross-sell capability between the two companies' users - unlike companies such as SAP, Oracle and IBM, who offered portals linking to applications on their own platforms.

The move follows closely the announcement by document and content management competitor Documentum that it is to purchase collaboration software company eRoom Technology for $120m (£77m).

Last July Documentum announced it would launch ad hoc collaboration features for its software, so that teams of workers could meet in 'chat rooms' using virtual whiteboards to create, store and index new content ready for live use.