Legato to Acquire OTG for $403 Million

Deal will create stronger data backup and archiving company.

Legato Systems Inc. on Thursday announced its acquisition of OTG Software Inc. for $403 million, or $11.13 a share.

"Todays announcement represents further expansion of our core strategy," David B. Wright, chairman, president and CEO of Legato, in Mountain View, Calif., said in a prepared statement. The vendors "share a common vision about how the market is evolving and what our customers need," and OTG, of Rockville, Md., will bring "additional software assets and intellectual capital" to the Legato.

"The message there is, the role of back-up as an independent process, and the role of archiving as an independent process, are now becoming a single value proposition to the clients," said Tony Prigmore, an analyst with Enterprise Storage Group Inc., in Milford, Mass.

Many of Legatos and OTGs customers are the same, so for those organizations, life will become simpler, Prigmore said.

Legatos customers include Compaq Computer Corp., TMP Interactive Inc.s Monster.com, and SAP AG. OTGs include Caterpillar Inc. and Legg Mason Inc.

The deal is awaiting shareholder and regulatory approval. OTG investors will own 21 percent of the combined company.