HP on Monday said it reached an agreement to buy Tower Software, which makes document and records management software.

Tower's software will provide additional document classification and records management capabilities to HP's existing products for compliance and e-discovery, or the process of finding and producing documents for legal cases, HP said.

Tower, a privately held company based in Australia, has been offered A$3.39 (US$3.11) for each of its outstanding shares, said Robin Purohit, vice president and general manager of information management at HP Software. HP didn't say how much that makes the acquisition worth.

The deal has the support of top Tower shareholders and is expected to close in the second quarter pending shareholder approval, Purohit said.

HP already offers a combined hardware and software product called the Integrated Archive Platform, which creates an archive of e-mail, images and other records. The product helps companies to comply with regulatory requirements for records maintenance and produce the required documents if they become involved in lawsuits.

Tower has been a partner of HP for many years, said Jonathan Martin, chief marketing officer for information management at HP Software. Tower's Trim Context content management software already operates in the Integrated Archive Platform to provide customers with record identification and classification capabilities.

The ability to manage, archive and search documents represents a growing market as organizations try to meet legal requirements and comply with federal rules and regulations, Purohit said.

Many customers are adopting Microsoft's SharePoint software for e-discovery purposes, Purohit said, and the addition of Tower will help HP expand its offerings to these customers, he said.

HP will try to retain most of Tower's 200 employees worldwide, Martin said. About half of them are in Canberra, Australia.

The IDG News Service is a Network World affiliate.