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Legato Inc. Thursday announced it is purchasing storage software vendor OTG Software Inc. in a deal valued at US$403 million.

Legato said it will acquire all outstanding shares of OTG and that it anticipates the deal will close by the end of the second quarter of this year.

Legato, long known for its backup/recovery and replication products, will use OTG Software's content and messaging technologies to provide its customers with automated recovery of e-mail and other application data.

OTG, a publicly traded company listed on the NASDAQ stock exchange, makes the XtenderSolutions line of products, which store, track and retrieve data over LANs, storage-area networks and the Web. The company's has three families of data products - for storage, content and messaging. Its EmailXtender lets IT move data securely off the e-mail message server, freeing up space and increasing speed and productivity.

OTG has over 400 employees in Rockville, Md. Richard Kay, chairman, president and CEO of OTG, is expected to join Legato's board after the merger. OTG will remain a separate division of Legato until the company integration is completed toward the end of this year.