EMC to Purchase LEGATO?

According to a Reuters report, EMC is considered the front-runner in the race to acquire LEGATO Systems, a storage and backup software company. The report states that EMC has offered $750 million to acquire the company, a price that other potential buyers have been unwilling to match. Reuters reports that other companies, including Computer Associates (CA), Hewlett-Packard (HP), IBM, VERITAS Software (one of LEGATO's chief competitors), and Sun Microsystems, have considered acquiring LEGATO but have decided against doing so. LEGATO recently hired investment bank Morgan Stanley to conduct an auction to sell the company. LEGATO was expected to fetch as much as $1 billion, and whether LEGATO will accept EMC's offer is not known. If a better offer doesn't surface, LEGATO would be forced to either sell to EMC or end its search for a buyer.

LEGATO sells information protection, application availability, and storage management solutions. In the past, EMC has targeted small and private companies for acquisition. EMC has increasingly focused its resources on software to help combat falling hardware sales. Most recently, EMC bought privately held Prisa Networks, which develops data storage management software.

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