Veritas snaps up two software firms

The software maker announces plans to acquire Precise Software and Jareva, two deals that will move Veritas beyond its core storage management business.

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
2 min read
Veritas Software on Thursday announced plans to acquire Precise Software Solutions and Jareva Technologies, two deals that will move it beyond its core storage management business.

Veritas will pay $537 million in a stock and cash for Precise Software, a network-management software maker.

Jareva Technologies was purchased for $62 million in cash. The company's software is designed to automatically activate additional servers and allow a particular server to swap out applications. For example, a server running Oracle on a Linux operating system could be changed to SAP on Windows.

"Both acquisitions represent application management software versus (Veritas') traditional core infrastructure--storage management," Daniel Renouard, an analyst with Robert W. Baird, wrote in a research report. "We believe Veritas will make additional application management acquisitions over the next few quarters in an attempt to further diversify products."

Veritas CEO Gary Bloom said the Precise acquisition will allow Veritas to offer a soup-to-nuts solution for problems customers encounter--ranging from hardware and software failures to performance issues.

Although analysts applauded the deal, investors pushed Veritas shares down in morning trading by 35 cents, or about 2 percent, to $16.94.

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"I think it's a good move and a pre-emptive one," said Sabrina Ricci, an analyst with Deutsche Bank North America. "The Precise deal is a conduit for Veritas to get more involved in the application infrastructure and does not have a lot of overlap with what Veritas does."

She noted, however, that the price Veritas paid for Precise was high. Under terms of the deal, Veritas will pay $16.50 per share for Precise's stock--a 37 percent premium over Precise's closing price of $12.05 Wednesday.

These two acquisitions follow another small deal Veritas undertook last month. The company announced plans to acquire NTP Software's storage management software product line, Storage Reporter. The Storage Reporter software allows customers to determine what types of files are filling up their storage.

"Veritas is always in an acquisition mode. That's how they've grown the company. But over the last year or two, their acquisitions have been quiet," Ricci said.