Mercury Interactive

(MERQ)

agreed to acquire

Kintana

, a privately held maker of information technology management software, in a cash and stock deal valued at $225 million.

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In a press release Tuesday, Mercury said it will pay $125 million in cash and the rest in the stock for the acquisition. Additionally, Mercury will assume all of Kintana's outstanding unvested options.

The companies expect to close the transaction in the third quarter. The deal requires antitrust clearance, Kintana stockholder approval and other customary closing conditions.

Kintana's 210 employees are expected to constitute a new Mercury business unit. Kintana's revenue for 2002 totaled $44.5 million, and Mercury had a top line of $400 million last year.

Shares of Mercury Interactive ended

Nasdaq

trading at $40.91 Monday.