EMC Buys Iomega for $213 Million

Infrastructure and services company EMC has bought storage vendor Iomega for $213 million in an all-cash deal.

Only a month after storage vendor Iomega rejected a buyout offer from infrastructure giant EMC, the companies hav gone ahead and done a deal: EMC will be acquiring Iomega for $213 million in an all-cash deal. The offer translates to $3.85 per share, which is a significant improvement over the $3.25 per share (or $178 million) EMC offered for the company back in March.

“Iomega will play a key role in EMC’s strategy to expand our information storage and management capabilities deeper into the high-growth consumer and small business markets,” said EMC chairman, president, and CEO Joe Tucci, in a statement. “In addition to industry-leading products and a household consumer brand, Iomega brings to EMC a deep knowledge of and established business practices for servicing consumers and small businesses.”

Iomega will also be paying a $7.5 million termination fee to Chinese storage vendor ExcelStor, which will not be part of EMC’s acquisition of the company. Iomega had entered into a definitive purchase agreement with ExcelStor last December, but EMC isn’t interested.

EMC plans to instantiate Iomega as EMC’s new Consumer/Small Business Products Division, which will also include EMC’s Retrospect backup software (itself acquired with Dantz some years ago) and EMC LifeLine.

Iomega may still be best known for its Zip, Jaz, and Rev line of removable cartridge drives, but the company has recently been focusing on lines of external hard drives targeting both the desktop and portable markets.