Veritas Software is set to dole out about $US1.6 billion in shares for the Network Storage and Management Group of Seagate Software, a subsidiary of storage giant Seagate Technologies.
Veritas is better known for its Unix storage management products, while the Seagate Software division is known for its Windows NT and NetWare offerings, Veritas said in a statement. If the merger goes ahead, the newly formed company will pitch itself as a source for a comprehensive "desktop-to-data center" portfolio of storage software products, Veritas said.
According to a definitive agreement signed between the companies, Veritas will issue about 33 million shares for the Seagate Software group. The tax-free acquisition will be accounted for under purchase accounting, an accounting method that lets Veritas treat Seagate's assets as an investment, allowing the value of the assets to be added to Veritas' own fair market value.
The newly formed company, which will retain the name Veritas, will have about 3200 employees in 16 countries, putting it among the world's largest providers of storage management software, according to Veritas.
In particular, the acquisition will give Veritas a strong presence in four areas of storage management software: backup and recovery, core operating system level storage, storage resource management and high availability.
Seagate Technology has entered a manufacturing and joint development agreement with the new company in order to make use of technology that can enhance its own storage products, Veritas said.
Mark Leslie, current president and CEO of Veritas, will hold the position of chairman of the board and CEO of the new company. Terry Cunningham, current president and chief operating officer of Seagate Software, will be president and chief operating officer.