EMC Corporation and LEGATO Systems today announced a definitive agreement for EMC to acquire LEGATO, in a stock transaction valued at approximately $1.3 billion. The acquisition is expected to extend EMC’s technology and market leadership in storage software.
‘This combination is all about improving the access, management and protection of an organisation’s core asset – information – through its complete lifecycle. We’re combining best-of-breed storage technology, two winning employee populations with similar reputations for customer focus, and two experienced management teams,’ said Joe Tucci, EMC’s President and CEO.
Tucci added that the acquisition of LEGATO – a global provider of enterprise-class software solutions and services for Information Lifecycle Management (ILM) – would make EMC the company that offers the most comprehensive, open and integrated information storage solutions.
Under terms of the agreement, LEGATO stockholders will receive 0.9 of a share of EMC common stock for each share of LEGATO common stock. Based upon the EMC closing stock price of $11.74 on July 7, 2003, the transaction is valued at approximately $1.3 billion.
The acquisition is subject to customary closing conditions, including LEGATO’s stockholder and regulatory approvals, and is expected to be completed in the fourth quarter of 2003.
When completed, EMC expects to take an expense charge in the quarter the transaction is closed for the value of LEGATO’s in-process research and development costs. EMC expects to report a net profit in each quarter in 2003 and expects the transaction to be slightly accretive to fully diluted earnings per share in 2004.
Upon completion of the acquisition, EMC intends to operate LEGATO as a software division of EMC headquartered in Mountain View, California, led by David B. Wright, LEGATO’s current Chairman and CEO.
EMC and LEGATO will integrate engineering and development functions to accelerate the development and delivery of comprehensive storage management solutions for high growth markets such as email management and HSM (hierarchical storage management)/archiving.