Legato to dominate disaster recovery market

US disaster recovery firm Legato is to purchase privately-held NT data specialist OTG for $403m.

The deal will firm up Legato's portfolio of disaster recovery products, particularly in the Windows space.

The deal has been struck with cash and shares and leaves Legato shareholders with 79 per cent of the combined company.

It still has to pass regulatory and shareholder approval, but directors are confident of closing the purchase by the summer.

OTG's software is used for storage virtualisation, currently a hot topic in the storage arena, and the management of data on a variety of platforms.

Legato has partnered OTG for over three years, but it has also been one of OTG's largest competitors.

However, in a conference call to investors, directors denied there was overlap between the two companies.

David Wright, CEO of Legato, said: "we have very complementary channels - we're strong in finance and telecoms and OTG are strong in government and healthcare.

"We've already had our partners on the phone very excited about where we're going with this... Make no mistake this is an enterprise play, OTG's application specific technology can take us straight into the enterprise."

However in a note that may worry some Legato customers, directors confirmed that in areas of product overlap, Legato products would be phased out in favour of the OTG alternative.

Richard Kay, Chairman and CEO of OTG said: "We're tremendously excited about this deal - this is going to be a great opportunity for both of us."