CA acquires XOsoft

TheDeal.com – Kate Gibson  - 7/11/06

With customers clamoring for more ways to protect data in the wake of Hurricane Katrina and other calamities, business software vendor CA Inc. has added disaster recovery software maker XOsoft Inc. to its string of acquisitions.

Islandia, N.Y.-based CA, formerly known as Computer Associates Inc., on Tuesday, July 11, disclosed its purchase of XOsoft, which employs about 60 people at its headquarters in Waltham, Mass., and another 14 at a research and development site near Tel Aviv, Israel.

Terms were not disclosed, but Bob Davis, senior vice president and general manager for CA's storage business unit, placed the deal's value as "well south" of the $100 million price tag reported by some news outlets.

XOsoft's products go beyond the traditional backup methods employed by companies.

"If I have an exchange server in New Orleans and I'm worried about hurricanes, I can have a mirror version of that exchange server in Chicago," Davis said.

XOsoft's customers include New York businesses that were able to keep operating through the major Northeast blackout in 2003, said Leonid Shtilman, the company's founder and CEO.

Historically among the most acquisitive technology companies, CA has pursued a plan of acquiring midsize technology vendors even as it contends with accounting troubles that led to the April departure of chief executive Sanjay Kumar. Kumar pled guilty the same month to securities fraud, perjury and obstruction of justice.

Last month, CA purchased MDY Group International Inc., a Fair Lawn, N.J.-based provider of records management software and services, also for undisclosed terms.

In May, CA closed its $75 million purchase of Cybermation Inc., a Markham, Ontario, jobs scheduling software maker. The company two months earlier finalized its $375 million deal for Brisbane, Calif., application software maker Wily Technology Inc., its largest purchase of a private company.

CA in January said it would pay an undisclosed amount for Control-F1 Corp., a privately held Calgary, Alberta, provider of automated technology management software.

The company last month disclosed two newly uncovered troubles that included sizable stock-option irregularities going back to 1997 that could force the company to restate hundreds of millions of dollars in past results.

Pillsbury Winthrop Shaw Pittman LLP partner Maria Galeno provided legal advice to CA on the deal.