By Richard Koman for SiliconValleyWatcher.com

HP President Marc Hurd shows he's serious about building a software business with the acquisition of Mercury Interactive, a Mountain View-based company specializing in business technology optimization (BTO.) Analysts say it's a stunningly good fit for HP - `It's so complementary we think it could be worth more to HP than to many other bidders,'' said Cindy Shaw of Moors and Cabot, the Merc reported.

It must be, because Mercury carries with it more than the usual risk baggage. It was the "grandaddy of companies being investigated for options backdating," as Jack Ciesielski puts it on Seeking Alpha. Backdating is claiming a grant date that is different that the actual grant date. Mercury did lots of that, apparently, plus incorrect accounting of options, incorrect reporting of options, failure to record options. You get the picture.

Hurd said HP had been pondering the Mercury purchase ``for a while.'' One of the issues HP was mulling over was the possibility of assuming liability for the costs of cleaning up Mercury's stock-option backdating.

HP Chief Financial Officer Bob Wayman told financial analysts during a conference call, ``We have done a lot of work evaluating the potential liability. We think we have our arms around them. . . . We think they're very manageable.''

As for the actual business synergy, CXOToday provides perspective:

The acquisition is likely to strengthen HP's OpenView line of offerings with Mercury's application management, application delivery, IT governance and SOA governance range of offerings. ...

In 2006 May, Mercury rolled out a new tool designed to let companies automate change management and carefully assess associated risk with new application and infrastructure modifications. With HP gradually maturing into a prominent infrastructure management vendor, capabilities such as Mercury's Change Control Management tool could do a lot to fortify its credentials.

The price of $52 a share for Mercury is a 33 percent premium on the company's closing price of $39 yesterday. Not bad for a company that's essentially damaged goods - even if it has cleaned up its act.