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A little wooing goes a long way. After weeks of being rebuffed, EMC announced Tuesday it would acquire smaller storage player maker Iomega for $213 million with the tender offer expected to complete by the end of June.
To accept EMC's (NYSE: EMC) $213 million, $3.85 per-share offer, Iomega (NYSE: IOM) terminated a separate purchase agreement with ExcelStor, costing the company a $7.5 million fee.
Acquiring Iomega gives EMC a huge customer footprint and a deep channel into the consumer, small-office and midsize storage markets, better positioning it against other strong SMB market competitors such as Dell (NASDAQ: DELL) and Hewlett-Packard (NYSE: HPQ).
Not surprisingly, EMC officials spoke glowingly of the move
We're super excited as we've wanted to get into this area," Joel Schwartz, senior vice president and general manager for EMC's storage platform unit, told InternetNews.com. "We're ready to make good use of Iomega's DNA."
The announcement, coming on the second day of Storage Networking World in Orlando, Fla., arrived with little fanfare, despite coming earlier than analysts and pundits had expected. A number of industry observers had earlier told InternetNews.com they suspected any deal wouldn't take place until the EMC World user conference in May.
For Iomega, the chance to partner with a giant in enterprise storage could potentially open a number of new doors.
"We are just very excited about the opportunity, as EMC provides the opportunity to be on even footing with the multibillion dollar players were competing with," Iomega CEO Jonathan Huberman told InternetNews.com, adding that Iomega had $336 million in revenues last year.
He said EMC's enterprise reach could lead to Iomega producing enterprise-level storage technologies, such as deduplication, for the small to midsized business environment.
"We have had no exposure to the enterprise until today, and the opportunity to move into that level is exciting," he added.
Following the acquisition's completion, Iomega will become the core of EMC's new consumer/small-business products division. Huberman will continue to lead the unit, and will report to Schwartz.
The division will also include EMC's Retrospect backup software and LifeLine network-attached software.
According to EMC, the two companies -- who have previously worked together as longstanding partners -- "will continue to build upon their existing foundation of technology integrations." Iomega has been reselling EMC Retrospect backup software since 2004.
Iomega, perhaps best known for its Zip, Jaz and Rev removable storage products and its line of external hard drives, had been making overtures to purchase the ExcelStor Group, a digital storage player, since early December. That relationship had culminated in a definitive share purchase agreement for ExcelStor.