Dr Mike Lynch, group chief executive and co-founder of Autonomy, believes that the purchase will enhance his company's product range, and that it should be easy to integrate the two firms.
But his competitors are less sure. John Lervik, chief executive at enterprise search firm Fast Search & Transfer, said: "This comes as no surprise. We have been evaluating Verity and its offerings ourselves and have found the price to be far too high.
"Verity has had little to no growth over the past years, and we see little, if any, synergy between its offerings and Autonomy's."
Analysts, however, have welcomed the move. "The IT industry is going through massive consolidation," said David Mitchell, practice leader at Ovum.
"Scale should be a fundamental part of the survival strategy of any software company. Only through achieving scale can software companies afford the R&D needed to maintain the innovation and growth.
"By integrating Verity into its operations Autonomy will help build scale."
The cash deal is currently up before shareholders and, although Verity has committed to voting for the deal, other shareholders need to give their approval.
The merger is expected to be closed by the end of this year or the beginning of 2006, subject to customary regulatory closing conditions.
If successful the new company would retain the Autonomy brand and the headquarters would remain in Cambridge in the UK. Verity would host the US office.
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