UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 19, 1999
LEGATO SYSTEMS, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-26130 94-3077394
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
3210 Porter Drive, Palo Alto, California 94304
(Address of Principal Executive Offices) (Zip Code)
Company's telephone number, including area code: (415) 812-6000
(Former Name or Former Address, if Changed Since Last Report.)
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Item 2. Acquisition of Assets
On April, 19, 1999, Legato Systems, Inc. (the "Company") completed its
acquisition of Qualix Group, Inc., a Delaware corporation, doing business as
FullTime Software, Inc., ("Qualix"), pursuant to an Agreement and Plan of
Reorganization, dated as of October 25, 1998 (the "Merger Agreement") by and
among the Company, Qualix and Hat Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of the Company ("Merger Sub") and Stock Option
Agreement dated as of October 25, 1998 (the "Stock Option Agreement) among
Legato Systems, Inc. and Qualix Group, Inc .
The Merger Sub merged with and into Qualix and Qualix became a wholly-owned
subsidiary of the Company, effective as of April 19, 1999. The transaction was
completed as a tax-free reorganization and accounted for as a
pooling-of-interests. In the transaction, each holder of an outstanding share of
Qualix common stock received a fraction of a share of the Common Stock of the
Company equal to the Exchange Ratio of 0.1411. The "Exchange Ratio" equals a
number, the numerator of which is (i) 1,721,000 shares of Common Stock of the
Company and the denominator of which is equal to (ii) the sum of (A) the
aggregate number of shares of Qualix Common Stock outstanding at April 19, 1999
and (B) the aggregate number of shares of Qualix Common Stock issuable upon
exercise of all outstanding options to acquire Qualix Common Stock at April 19,
1999. As of April 19, 1999, Qualix had approximately 10.9 million shares of
Common Stock outstanding and 1.3 million options to acquire Common Stock.
The Merger Agreement and Stock Option Agreement are incorporated herein by
reference from the Company's Current Report on Form 8-K for an event dated
October 25, 1998 and are listed herein as Exhibit 2.1 and Exhibit 2.2. Copies of
the Company's press releases announcing the effectiveness of the Merger and the
new organization to integrate Qualix into the Company's operations are
incorporated herein by reference. The foregoing description of such documents is
qualified in its entirety by reference to such Exhibits.
<PAGE>
Item 7. Exhibits.
(a) Financial Statements of Businesses Acquired:
The unaudited condensed financial statements of Qualix Group, Inc. as of
December 31, 1998 and for each of the six month periods ended December 31, 1998
and December 1997 are incorporated by reference in the prospectus from Legato
Systems, Inc.'s registration statement No 333-74433 on Form S-4 filed on March
16, 1999.
The consolidated financial statements of Qualix Group, Inc. as of June 30,
1998 and June 30, 1997 and for each of the three years in the three year period
ended June 30, 1998 are incorporated by reference in the prospectus from Legato
Systems, Inc.'s registration statement No 333-74433 on Form S-4 filed on March
16, 1999.
(b) Pro Forma Financial Information:
The information from the section entitled "Unaudited Pro Forma Combined
Condensed Consolidated Financial Statements", appearing on pages 71-75, are
incorporated by reference in the prospectus from Legato Systems, Inc.'s
registration statement No 333-74433 on Form S-4 filed on March 16, 1999.
(c) Exhibits. The following documents are filed as exhibits to this initial
report:
Exhibit
Number Description
2.1(1)(2) Agreement and Plan of Reorganization dated as of October 25, 1998
by and among Legato Systems, Inc., Qualix Group, Inc. and Hat
Acquisition Corp., including certain exhibits thereto.
2.2(2) Stock Option Agreement dated as of October 25, 1998 among Legato
Systems, Inc. and Qualix Group, Inc.
23.3 Consent of Deloitte & Touche LLP.
99.1 Press release, dated October 26, 1999.
99.2 Press release, dated April 19, 1999.
(1) Incorporated by reference to the registrant's Current Report on Form
8-K dated October 25, 1998.
(2) Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits
and schedules to this Agreement and Plan of Reorganization have been omitted.
Such exhibits and schedules will be submitted to the Securities and Exchange
Commission upon request.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEGATO SYSTEMS, INC.
Date: May 4, 1999
By: /s/ Stephen C. Wise
Name: Stephen C. Wise
Title: Senior Vice President, Finance and
Administration and Chief Financial
Officer
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EXHIBIT INDEX
Exhibit
Number Description
2.1(1)(2) Agreement and Plan of Reorganization dated as of October 25, 1998
by and among Legato Systems, Inc., Qualix Group, Inc. and Hat
Acquisition Corp., including certain exhibits thereto.
2.2(2) Stock Option Agreement dated as of October 25, 1998 among Legato
Systems, Inc. and Qualix Group, Inc.
23.3 Consent of Deloitte & Touche LLP.
99.1 Press release, dated October 26, 1999.
99.2 Press release, dated April 19, 1999.
(1) Incorporated by reference to the registrant's Current Report on Form
8-K, dated October 25, 1998.
(2) Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits
and schedules to this Agreement and Plan of Reorganization have been omitted.
Such exhibits and schedules will be submitted to the Securities and Exchange
Commission upon request.
<PAGE>
EXHIBIT 23.3
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this current report of
Legato Systems, Inc. on Form 8-K of our report dated July 23, 1998 on the
consolidated financial statements of Qualix Group, Inc. as of June 30, 1997 and
1998 and the three years in the period ended June 30, 1998, appearing in the
registration statement No. 333-74433 on Form S-4 of Legato Systems, Inc.
/s/ DELOITTE & TOUCHE LLP
San Jose, California
May 4, 1999
<PAGE>
EXHIBIT 99.1
Legato Systems, Inc. Announces Definitive Agreement To Acquire
Fulltime Software, Inc.
FOR IMMEDIATE RELEASE
EDITORIAL CONTACT: INVESTOR CONTACT:
Suzan Woods Stephen C. Wise
Director of Market Relations Chief Financial Officer
(650) 812-6112 (650) 812-6102
[email protected] [email protected]
PALO ALTO, CA, October 26, 1998 - Legato Systems, Inc. (Nasdaq: LGTO), a
leader in the enterprise storage management software market, today announced
that it has signed a definitive agreement to acquire FullTime Software, Inc.
(Nasdaq: FTSW) in a transaction valued at approximately $69.4 million. The
transaction is expected to close by, or shortly after, December 1998, and is
subject to the satisfaction of standard closing conditions, including regulatory
approval and the approval of FullTime's stockholders. The acquisition is
contemplated to be a tax-free reorganization in which Legato will issue
1,721,000 shares of its stock in exchange for all of the stock and options of
FullTime Software. The transaction is expected to be accounted for as a pooling
of interests. Legato intends to integrate the complete FullTime product
portfolio into the Legato product line following the acquisition. The
transaction is expected to be accretive to earnings for Legato's 1999 fiscal
year.
FullTime Software, Inc., formerly known as Qualix Group, Inc., is the
market leader and leading developer of distributed, enterprise-wide,
cross-platform, adaptive computing solutions that enable customers to
proactively manage application service level availability. Its products help
customers to optimize IT resources while maximizing reliability, accessibility,
and efficiency of applications across a continuum of business events. FullTime
Software products have ensured the availability of business-critical
applications at more than 17,000 installations around the world, including
government organizations and many Fortune 1000 companies in telecommunications,
finance, retail, high technology, and other industries.
Located in San Mateo, CA, FullTime Software provides enterprise and
departmental solutions that ensure applications, data, and system resources are
available to users on a "full time" basis. FullTime's solutions are the
industry's first to enable service level availability during planned computing
events, such as operational maintenance or installations, application tuning,
upgrades and configuration changes. By expanding its solutions to cover
unplanned computing events, such as system, application and network failures,
FullTime addresses the larger, more challenging and growing problem of
eliminating downtime for Fortune 1000 customers.
Louis C. Cole, president and CEO of Legato Systems, Inc., said, "The
combination of FullTime Software with Legato Systems fits perfectly with our
expanded Enterprise Storage Management Architecture (ESMA) announced on August
17, 1998. FullTime Software's high availability, clustering, and service level
availability products will give us a significant market advantage in answering
the data accessibility needs of our customers." According to Richard G. Thau,
CEO of FullTime Software, Inc., "We are very excited about the combination of
FullTime's market-leading technology and products with Legato's industry-leading
sales and distribution channels."
About Legato Systems
Legato Systems, Inc. develops, markets, and supports an integrated set of
enterprise storage management software products for heterogeneous client/server
computing environments. Large customers around the world select the Company's
solution because of its reliability, platform independence, and ability to
seamlessly integrate with existing and future computing environments. Legato's
storage management software has become the recognized de facto standard with the
largest installed base, representing over 37,000 customers, protecting more than
4,000,000 systems. Twenty-four of the world's largest system and applications
vendors have chosen Legato's software as their preferred storage management
solution for their customers, including Banyan, BMC Software, Compaq/Digital,
Compaq/Tandem, Data General, Fujitsu/Amdahl, Fujitsu/ICL, Groupe Bull,
Hewlett-Packard, Hitachi, Informix, NEC, Netscape, Network Appliance,
Nihon-Unisys, Oracle, Siemens Nixdorf, Silicon Graphics, Sony and Sun
Microsystems. The Company's NetWorker, BusinesSuite, SmartMedia, and GEMS
products are also licensed, resold, or endorsed by other major vendors,
including Computer Associates; Tivoli, an IBM company; Microsoft Corporation;
MTI Technology; Novell; and SAP. Legato's home page address on the World Wide
Web is http://www.legato.com.
This announcement contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from historical or anticipated results in such statements.
Factors that might cause such a difference include, but are not limited to,
risks associated with acquisitions generally, including integration of
operations, diversion of management's time and attention, risk of a downturn in
FullTime's results of operations during the period the merger is pending, and
other risks discussed in the "Risk Factors" section of the Company's Report on
Form 10-K filed with the Securities and Exchange Commission in March, 1998, and
in the "Risk Factors" section of the Company's Report on Form 10-Q filed with
the Securities and Exchange Commission in August, 1998, copies of which are
available on request from the Company. This public announcement contains
information that is accurate as of October 26, 1998, the date of this public
announcement.
<PAGE>
EXHIBIT 99.2
FOR IMMEDIATE RELEASE EDITORIAL CONTACT:
Trish Terry
Public Relations
925.556.4100 ext. 1302
[email protected]
INVESTOR CONTACT:
Stephen C. Wise
Chief Financial Officer
650.812.6102
[email protected]
LEGATO SYSTEMS COMPLETES ACQUISITION OF FULLTIME SOFTWARE
Legato well-positioned for leveraging storage management expertise
into the 21st Century
PALO ALTO, Calif., Apr. 19, 1999 -- Legato Systems, Inc. (NASDAQ: LGTO),
the leader in the enterprise storage management software market, completed the
acquisition of FullTime Software, based in San Mateo, Calif. The transaction is
a tax-free reorganization, with Legato issuing 1,721,000 shares of stock in
exchange for all of FullTime's shares, and will be accounted for as a pooling of
interest. This acquisition, as well as the previously announced Intelliguard
Software acquisition that closed on April 1, 1999, positions Legato as the
emerging leader of the next generation of Storage Area Network (SAN) intelligent
storage devices with unique and industry leading data replication, clustering,
and data movement technologies.
"FullTime Software's highly optimized clustering and service level
availability products now provide us with a significant market advantage in
addressing the data accessibility needs of our customers. In combination with
the Celestra serverless data movement technology gained from the Intelliguard
acquisition, Legato is now well-positioned to meet the demanding business
continuance and storage management needs of the 21st century," said Louis C.
Cole, president and CEO of Legato Systems.
FullTime Software, formerly known as Qualix Group, Inc., is the developer
of distributed, enterprise-wide, cross-platform, adaptive computing solutions
that enable customers to proactively manage application service level
availability. Currently, these products ensure the availability of
business-critical applications at more than 17,000 installations around the
world, including government organizations and many Fortune 1000 companies in
telecommunications, finance, high technology, and other industries.
As provided in the acquisition plan, all three companies will now function
as one company. "Integration activities associated with both the FullTime and
Intelliguard acquisitions were very successful and now fully completed," stated
Stephen C. Wise, Legato's chief financial officer. "Effective immediately, the
newly combined companies will now be able to benefit from selling and marketing
FullTime and Intelliguard products through Legato's established sales channels
and key partnerships and relationships," Wise added.
With completion of the acquisitions, Legato Systems now employs
approximately 1,000 people worldwide in 35 offices and 16 countries. Excluding
non-recurring merger-related costs and the ongoing amortization associated with
the Intelliguard acquisition, the Company believes that the newly acquired
companies will provide leveraged revenue opportunities during 1999 and be
accretive to earnings in the second quarter of 1999, the first quarter of the
combined operations.
"Grounded upon our foundation of innovation and technical excellence,
Legato's strategy is to become the most focused and formidable company in the
storage management marketplace as well as the rapidly growing internet, web and
e-commerce space," said Louis C. Cole, president and CEO of Legato Systems.
About Legato Systems
Legato is uniquely positioned as the only enterprise storage management
software provider of fully integrated solutions based upon a consistent,
scalable, and manageable architecture. Legato's storage management software has
become the recognized de facto standard with the largest installed base,
representing over 40,000 customers, protecting more than 4,000,000 systems.
Twenty-four of the world's largest system and applications vendors have chosen
Legato as a strategic partner, including: Compaq, Hewlett-Packard, Netscape,
Oracle and Sun Microsystems. Legato's home page address is
http://www.legato.com.
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from historical or anticipated results in such statements.
Factors that might cause such a difference include, but are not limited to,
risks associated with acquisitions generally, including integration of
operations, diversion of management's time and attention, risk of a downturn in
the acquired company's results of operations and other risks discussed in the
"Risk Factors" section of the Company's Report on Form 10-K filed with the
Securities and Exchange Commission in February, 1999, and in the "Risk Factors"
copies of which are available on request from the Company. This public
announcement contains information that is accurate as of April 19, 1999, the
date of this public announcement.
Legato NetWorker and Legato SmartMedia are registered trademarks, and
NetWorker Archive, NetWorker HSM, ClientPak, SmartClient, StorSuite,
BusinesSuite, Power Edition, Legato GEMS, and OpenTape are trademarks of Legato
Systems, Inc. in the U.S. and/or other countries. All other product, trademark,
company, or service names mentioned herein are the property of their respective
owners.
