Scansoft is buying Caere - best known for its OmniPage OCR (Optical Character Recognition) software - in a transaction worth $140million.

The deal is expected to be completed by the end of April. The combined company will keep the Scansoft name.

Scansoft has achieved its greatest success in the UK market. It is known for its digital imaging software - such as Textbridge Pro and PaperPort Deluxe. It recently took on the former MetaCreations titles Kai’s SuperGoo and PhotoSoap.

Caere specializes in software for converting paper documents into electronic information. As well as OmniPage, it makes OmniForm - software for creating electronic forms - and PageKeeper personal document management software. Caere’s strongest markets are in Germany, France, the Netherlands, Eastern Europe and the UK.

Michael Tivnan, who will keep his role as president and CEO of Scansoft, explained the move: "The complementary offerings between the two companies product lines will help us better meet the needs of the flourishing global digital imaging market.

"Upon full integration, we expect to record at least $10 million in annual cost savings, primarily through the elimination of redundant functions and the use of economies of scale for product distribution."

Robert Teresi, Caere’s chairman and CEO, will become a member of the board of directors and "will assist in the integration of the companies", according to a joint statement.