EMC nears final stage of Documentum purchase
Published: 11 Dec 2003 11:25 GMT
Storage giant EMC said on Wednesday that it expects to close out its $1.7bn acquisition of content management software specialist Documentum next week.
The two companies were able to accelerate their proposed merger, which was announced in mid-October, because the necessary regulatory approvals were completed quickly, EMC representatives said. The acquisition was originally slated to close early in 2004, and remains dependent on a shareholder vote for official recognition.
EMC said it now expects to finish the transaction after that vote is held on Thursday, 18 December. Under the terms of the deal, EMC is offering 2.18 shares of its stock for each share of Documentum.
The most significant impact of the accelerated merger plan relates to EMC's fourth-quarter 2003 earnings, which will now include approximately $30m to $35m in additional revenue from Documentum. Based on this, EMC said it expects fourth-quarter revenue to total between $1.8bn and $1.83bn, compared with sales of $1.5bn for the same period in 2002.
EMC said it believes the Documentum acquisition furthers its effort to build its software-related business and increase its ability to deliver so-called information life-cycle management (ILM) technologies.
ILM is the process of dealing with content by organising its storage based on business requirements rather than on when the content enters a company's storage systems. In July, EMC announced a $1.3bn acquisition of Legato Systems, a maker of backup and recovery systems, as part of its emerging ILM strategy.
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