Interwoven's (NASDAQ:IWOV) stock has nearly doubled since last July, as the company revamps operations, improves its software offerings, and boosts cash flows. It doesn't hurt that players like IBM (NYSE:IBM) and Oracle (NASDAQ:ORCL) have recently bought out several rivals in its corner of the enterprise software market. These catalysts should provide even more momentum for Interwoven's stock.

Interwoven develops content management software for large organizations such as Cisco (NASDAQ:CSCO), FedEx (NYSE:FDX), and even the Federal Reserve Bank. It's an important segment, given the complexities of dealing with the global explosion in data.

Fiscal first-quarter revenues increased 13% to $52.7 million, and licenses grew 12% to $19.6 million. Interwoven added 74 customers; its total now exceeds 3,800.

Because of a voluntary stock-option investigation, management did not provide details on its net income. Still, the company posted juicy cash flows of $11.9 million in the first quarter, and it holds $188 million in the bank.

Interwoven also recently hired a new CEO, Joe Cowan, a seasoned executive in the enterprise software space. He previously sold Manugistics to JDA Software in April 2006.

In light of Cowan's M&A experience, it's no surprise that investors continue to speculate on a buyout for Interwoven. Over the past year, IBM bought FileNet, Oracle acquired Stellent, and Open Text (NASDAQ:OTEX) purchased Hummingbird. Tech biggies clearly see the strategic importance of content management, and they're willing to pay premium valuations to acquire it. The FileNet deal was priced at 3.61 times revenues, while Stellent's purchase came at 3.37 times revenues.

Despite the run-up in the stock, Interwoven's valuation is still reasonable, at about 2.5 times revenues. The company is also in the midst of several major product launches, which should continue to spur its growth. Even if there's no buyout looming, Interwoven will likely keep shareholders happy.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 2,719 out of 25,386 in CAPS. The Fool has a disclosure policy.