Updated from 4:54 p.m. EDT

Storage giant NetApp ( NTAP) has thrown down $1.5 billion to acquire publicly traded backup specialist Data Domain ( DDUP).

Under the terms of the deal, NetApp will acquire all of the outstanding shares of Data Domain's common stock for $25 per share in cash and stock.

"This combination is a great opportunity for both NetApp and Data Domain," said NetApp CEO Dan Warmenhoven in a statement. "NetApp has the distribution channels and international reach to offer Data Domain products to more customers, accelerating growth and market adoption."

Data Domain is seen as key developer of de-duplication(subscription required) technology, which ensure that identical pieces of data are not stored. The Santa Clara, Calif.-based company went public in 2007 and generated revenue of $79 million in its recent first quarter.

News of the deal pushed Data Domain's shares up $6.34, or 35.7%, to $24.30, in extended trading Wednesday. NetApp's stock, however, dipped 45 cents, or 2.66%, to $16.89.

NetApp, which competes with EMC ( EMC) and Hewlett-Packard ( HPQ), released its fourth-quarter results after the market closed.

The Sunnyvale, Calif.-based firm reported revenue of $880 million, down from $938 million in the same period last year, but above analysts' estimate of $856.48 million.

NetApp earned 23 cents a share on net income of $75 million, compared to 26 cents a share and $90 million in the year-ago quarter. Excluding charges, the company posted earnings of 31 cents a share on net income of $103 million, compared to 38 cents a share and $131 million in the year-ago quarter. Analysts had expected earnings of 23 cents a share.

NetApp did not give revenue guidance for the fourth quarter, but expects a non-GAAP gross margin of 61%.

The storage giant expects the Data Domain deal to close in the next 60 to 100 days, and says that it will be accretive on a non-GAAP basis within the subsequent 12 months.