Legato to Buy OTG Software for $403 Million

Data-protection giant

Legato Systems

(LGTO)

agreed to buy storage software maker

OTG

(OTGS)

for $403 million, or $11.13 a share.

Each OTG Software share will convert into a right to receive 0.6876 of a Legato common share and $2.50 cash. OTG closed Wednesday down 30 cents, or 3.2%, at $9.20. Legato Systems closed up 55 cents, or 4.6%, to $12.55.

OTG shareholders will own about 21% of the combined company when the deal closes in the second quarter, Legato said. The transaction must be approved by shareholders of both companies and the government.