SAN FRANCISCO-EMC had to increase its offer twice-from $178 million to $205.5 million to $213 million in cash-but it finally landed Iomega on April 8 to be the cornerstone of the company's new consumer focus.
The world's largest data storage infrastructure company announced at the RSA Conference at the Moscone Center here that it had finalized a tender offer of $3.85 per outstanding share, or approximately $213 million in cash for the 54.8 million outstanding shares, convincing Iomega board members and shareholders to agree. Iomega's common stock ended the day at $3.64 per share.
Iomega's board and shareholders made a strategic decision in voting for the deal. On the table was another proposal announced December 2007 from the Chinese government, which was in the process of buying a substantial stake in the company.
The deal with the Chinese was going to be a stock trade transaction worth potentially much more than the all-cash EMC offer.
Iomega now will serve as the core of EMC's new Consumer/Small Business Products Division. The new division, to be led by current Iomega CEO Jonathan Huberman, will also include EMC Retrospect and EMC LifeLine software.
Iomega has a number of products that EMC said it would like to use in its initiative to move deeper into midmarket sales. For example, Iomega's Rev line could support EMC's drive to offer more consumer solutions and hybrid products for home businesses and remote offices.
"These two companies have been partners for a long time," Bob Laliberte, storage analyst with Enterprise Strategy Group, told eWEEK. "It would seem to be a natural progression for EMC to acquire Iomega in order to continue to develop more consumer-oriented products. EMC could then offer hybrid-type products for both home businesses and remote offices, using Iomega's Rev line."
Iomega has sold more than 400 million digital storage drives and disks since its founding in 1980. The company is well known for such consumer products as the Zip and Jaz storage drives.
EMC expects to complete the Iomega acquisition by June.