EMC prevails in Iomega deal
Data storage firm OKs $213m offer
EMC Corp.'s aggressive courtship of San Diego data storage company Iomega Corp. paid off yesterday, as Iomega accepted a $213 million buyout offer that will make EMC a force in data backup gear for consumers.
The deal culminates weeks of bargaining that began when EMC offered $3.25 a share or $178 million for Iomega. The company is best known for its line of high-capacity Zip floppy disk drives and for a line of external hard drives.
In mid-March, Iomega turned down the proposal, saying that it was inferior to a deal it had already struck with ExcelStor Great Wall Technology Ltd. of the Cayman Islands and Shenzhen ExcelStor Technology of China. A week later, EMC increased its bid to $3.75 or $205.5 million, and Iomega announced a willingness to enter negotiations. Now Iomega has agreed to EMC's latest offer of $3.85 a share. The companies say the deal should be completed during the second quarter.
Jonathan Huberman, Iomega's chief executive, said his company would pay ExcelStor $7.5 million in compensation for breaking the deal. Huberman said EMC would give his company the scale to compete against bigger competitors.
Joel Schwartz, general manager of EMC's storage division, said Iomega would form the core of a new division of the company, dedicated to storage products for homes and small businesses.
EMC of Hopkinton is moving on a number of fronts to expand beyond its core business of providing software hardware and software to giant businesses.
EMC shares closed down 4 cents to $14.84; Iomega dipped 4 cents to $3.64, both on the New York Stock Exchange.
Hiawatha Bray can be reached at bray@globe.com.
