Personal computer maker Hewlett-Packard Co. (HPQ) and Tower Software, a document and records management software company based in Canberra, Australia, on Monday said they have signed a pre-bid agreement for the former to acquire Tower. The acquisition will be conducted by means of an off-market takeover bid for all of the outstanding shares of Tower. The takeover is expected to close in the second quarter of calendar year 2008.Tower has more than 22 years of paper and electronic records management experience and serves nearly 1,000 customers with more than 780,000 users in 32 countries. The board of directors of Tower has unanimously approved the transaction and recommends that Tower shareholders accept HP's offer in the absence of a higher third-party offer. The three largest shareholders of Tower, Quadrant Private Equity, Brand Hoff and Martin Harwood, have advised Tower that they and their associated interests intend to accept HP's offer in the absence of a higher third-party offer. Between them, Quadrant Private Equity, Brand Hoff and Martin Harwood have an interest in more than 90% of Tower shares. The deal will enable Palo Alto, California-based HP to expand its offerings in the fast-growing electronic discovery and compliance software market. It will add electronic records management to HP Software's existing e-discovery and compliance capabilities in information collection and retention. As per an existing alliance between the two companies, Tower TRIM Context has been integrated with the HP Integrated Archive Platform to provide customers with a combined records management and compliance archiving solution. Combining HP's and Tower's overall software capabilities will enable customers to rapidly identify electronic business records from general business communication. They can also collect those business records in a scalable and high-performance archive platform and preserve them for long-term future use in legal discovery or compliance activities. The addition of Tower also is expected to enable HP Software to address the growing Microsoft SharePoint compliance and e-discovery opportunities. Content stored in Microsoft SharePoint is coming under increased scrutiny from litigators, legal counsels and compliance officers involved in legal discovery, corporate governance or regulatory compliance. According to Robin Purohit, vice president and general manager, Information Management, Software, HP, In reaction to increased business regulation, electronic records management has moved from a back-office task to a business-critical function. The combination of the HP and Tower software portfolios is expected to be hugely beneficial to the legal and IT organizations of businesses all over the world. HPQ closed Monday's regular trade at $45.66, down $0.43 or 0.93%, on 22.42 million shares. The stock added 5 cents in the extended trade.
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