EMC to acquire Legato

BANGALORE: EMC Corp and Legato have entered into a definitive agreement of acquisition, wherein the former acquired Legato, in a stock transaction valued at approximately $1.3 billion. This move underscores EMC's commitment to open, heterogeneous storage management, expands EMC's capabilities around information access and recovery, and deepens EMC's unparalleled storage management expertise and customer service and support.

Joe Tucci, EMC's President and CEO, said, " We are combining best-of-breed storage technology, two winning employee populations with similar reputations for customer focus, and two experienced management teams with complementary visions for the future of information management. This represents a significant win for both companies' customers, employees, partners and stockholders, accelerating the evolution of EMC as the company that offers the most comprehensive, open and integrated information storage solutions."

The acquisition will accelerate EMC's ability to deliver the industry's most complete information lifecycle management solutions, helping customers get the maximum value from their information at the lowest total cost at every point in the information lifecycle. Further, Legato’s software-focused sales expertise, extensive channel partner relationships, and strong service capabilities will complement EMC's distribution strategy and enhance its ability to serve customers of all sizes around the globe.

David B. Wright, Legato’s Chairman and CEO said, "Legato’s current shareholders, employees, customers, and partners will see tremendous benefits from EMC's extensive R&D resources, expertise in networked storage, global distribution and customer reach, and overall financial strength. "

Under terms of the agreement, Legato stockholders will receive 0.9 of a share of EMC common stock for each share of 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 calendar year 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 R&D 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.