EMC closing in on Documentum merger
The storage giant says that it expects to complete its $1.7 billion 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, Dec. 18. Under the terms of the deal, Hopkinton, Mass.-based 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 $30 million to $35 million in additional revenue from Documentum. Based on this, EMC said it expects fourth-quarter revenue to total between $1.8 billion and $1.83 billion, compared with sales of $1.5 billion 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 organizing its storage based on business requirements rather than on when the content enters a company's storage systems. In July, EMC announced a $1.3 billion acquisition of Legato Systems, a maker of backup and recovery systems, as part of its emerging ILM strategy.