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EMC BUYING DOCUMENTUM FOR $1.7 BILLION

Data storage company EMC Corp agreed to acquire management software company Documentum Inc for $1.7 billion, a 29 percent premium based on the Oct. 13 closing price.

Pleasanton, Calif.-based Documentum's software helps companies manage so-called "unstructured content" -- everything from Web pages to spreadsheets -- and synthesize them.

"Much of the information in today's enterprise is unstructured data," EMC president and chief executive Joe Tucci said in announcing the deal Tuesday. "Documentum enables organizations to organize and manage their growing volumes of unstructured data by leveraging knowledge about that data -- information about information."

The move follows EMC's return to growth mode with a $1.2 billion acquisition of Legato Systems Inc, announced in July. At that time, the company indicated another similarly-sized buy was on the horizon.

Under the agreement, Documentum stockholders would receive 2.175 shares of EMC common stock for each share of Documentum common stock. The transaction is expected to be completed in the first quarter of calendar 2004. EMC said the deal would cost it 2 cents per share in the first quarter, and slightly add to earnings by 2005.

Also Tuesday, EMC announced preliminary third-quarter results, saying it expects revenue of $1.51 billion and earnings of 7 cents per share, including a 2-cent benefit resulting from the favorable resolution of a tax audit. Analysts surveyed by Thomson First Call were expecting earnings of 4 cents per share.

In midday trading on the New York Stock Exchange, EMC shares slipped $1.20, or more than 8 percent, to $13.25. Documentum shares gained $4, or more than 16 percent, to $28.42 on the Nasdaq Stock Market.