EMC Corporation to Purchase Iomega Corporation for 0.63 Times Revenue

Weekly Corporate Growth Report, Apr 14, 2008

The Deal: Iomega Corporation has accepted a revised takeover offer from EMC Corporation. Under the terms of the deal, EMC will pay $3.85 in cash for each share of Iomega, a premium of six percent over Iomega's share price prior to the revised offer. EMC previously offered $3.75 per share in March 2008. The companies expect the new deal to close in the second quarter of 2008, subject to regulatory approvals and other customary closing conditions. The new transaction cancels a deal between Iomega and ExcelStor, a division of Great Wall Technology. Iomega has paid a $7.5 million termination fee related to the ExcelStor deal.

Discussion: Iomega makes a range of computer data storage devices for the consumer market. Company products include rewritable CD and DVD drives, desktop and portable hard drives, and floppy disk drives. Iomega also makes business products such as NAS (network attached storage) equipment and removable hard disk drives. Subsidiary CSCI offers managed services for remote access and security.

EMC makes large-scale data storage devices used to store and retrieve massive amounts of data. The company is a leading provider of RAID (redundant array of independent disks) storage systems and also sells NAS equipment and data management software.

The acquisition of Iomega will allow EMC to expand into the small business and consumer markets.