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NetApp Trumps EMC with $1.9B Offer for Data Domain
By: Chris Preimesberger
2009-06-03
Article Rating:    / 1
There are 1 user comments on this Data Storage, Data Backup and Storage Virtualization story.
The data storage world awaits a response from EMC, which on June 1 offered $1.8 billion for the Santa Clara, Calif.-based storage systems provider. EMC is a powerful company accustomed to getting what it wants, so it is possible that the bidding war is not over.NetApp trumped much larger competitor EMC June 3 by making a revised
proposal totaling about $1.9 billion to acquire storage systems
provider and data deduplication specialist Data Domain.
NetApp on May 20 announced it would buy Data Domain for $1.5 billion in cash and stock, or $25 per share. EMC then surprised the storage world June 1 with a $1.8 billion offer for the Santa Clara, Calif.-based company, or $30 per share in cash, and declared its offer as "superior."
NetApp may have had the last laugh, however. Reuters reported June
3, according to sources close to the negotiations, that Data
Domain has accepted the NetApp offer as final. No confirmation of this
had been received by eWEEK at the time of this writing, however.
Nothing will be signed, sealed and delivered until the boards and shareholders of both companies vote on the transaction.
EMC is a powerful company accustomed to getting what it wants, so it is possible that the bidding war is not over.
Under the terms of its new proposal, Sunnyvale, Calif.-based NetApp
will acquire all of the outstanding shares of Data Domain common stock
for $30 per share in cash and stock in a transaction valued at
approximately $1.9 billion, net of Data Domain's cash.
Huge Turnaround in Stock Value
Data Domain shareholders have to be very happy with the sudden
turnaround in the stock. On March 16, Data Domain was selling for
$10.24. It was selling for more than $32 on June 3.
"Our strategic rationale remains the same and we firmly believe that
the combination of our two companies will provide a greater opportunity
and risk-adjusted value for Data Domain shareholders, customers, and
partners," Dan Warmenhoven, chairman and CEO of NetApp, said in a
prepared statement.
"The complementary nature of the Data Domain and NetApp product lines
will result in higher aggregate growth compared to the redundancies
that would result with the EMC product line."
Data Domain's portfolio provides NetApp a complementary offering to
expand its reach in the market for heterogeneous disk-based backup,
Warmenhoven said.
The Data Domain acquisition is expected to increase NetApp's ability to
capitalize on the growth of disk-based backup adoption, a trend
accelerated by the economics of deduplication.
"NetApp's offer for Data Domain is also superior to EMC's previously
announced, unsolicited proposal, as it offers a combination of value
certainty and the opportunity for Data Domain shareholders to
participate in the future success of the combined NetApp and Data
Domain entity," Warmenhoven said.
"The cultural compatibility between Data Domain and NetApp will
maximize the potential for continued innovation from a creative and
motivated employee base," Warmenhoven said. "This will not only create
a meaningful choice for our customers but also lead to a complementary
combination with no obstacles to an expeditious close of the
acquisition.
"Therefore, we are as committed to this partnership now as we were when
we first announced our intent to acquire Data Domain," Warmenhoven
said.
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