News

posted on 09 April 2008 07:43

Iomega has rolled over and agreed to be bought by EMC at an increased price of $3.85/share or $213 million. Iomega CEO Jonathan Huberman gets a whole new EMC consumer and small business division to run with LifeLine and Retrospect software included. The ExcelStor purchase agreement has been terminated with Iomega paying a $7.5 million fee.

Iomega makes the successful REV removable hard drive and other consumer and small business disk storage products. There is a China connection in that Iomega is a subsidiary of China's Great Wall Technology (GWT). In December 2007, Iomega arranged to buy the GWT subsidiary ExcelStor Group in an all-stock deal by issuing 84 million shares in exchange for all ExcelStor's outstanding stock. This deal has been cancelled because of the EMC bid acceptance.

EMC first bid for Iomega just four weeks ago at $3.25/share or $178 million. Its bid was rejected as being inferior to the ExcelStor deal so EMC raised it to $205 million. That was also rejected although Iomega agreed to talks. Now at a price of $3.85/share valuing Iomega at $213 millon, $35 million more than the original bid, Huberman and his board have agreed to be acquired. The deal should close in the second half of this year.

EMC wants Iomega for its consumer and small business products, its channel, and its China connections. The fit between the two companies is good. Every REV kit sold includes EMC's Retrospect software and Iomega has plans to embed EMC LifeLine into its multi-drive network storage products, expected this summer with the launch of its next-generation StorCenter Network hard drive products.

Huberman gets a much bigger yard to play in. Iomega becomes the core of a whole new EMC division; the Consumer/Small Business Products Division and its been given Retrospect and LifeLine software to look after. This looks a smart move as Retrospect backup software has been perceived as not doing as well as it could and having something of a reutation for not being as easy to use as it might be.

Huberman reports to Joel Schwartz, the SVP and GM for EMC's Storage Platforms. No doubt Huberman and his team will gain handsomely from the deal - and so they should; Iomega's re-building under Huberman has been impressive. The prospect is that EMC's consumer and small business storage business willl be energised over the next few years and become a formidable and major force in the market.

EMC flash storage? EMC-branded removable hard drives?

Ah well, that's that one over. Now, remind me, after Iomega, who's next? ProStor....Buffalo ....LaCie......Data Domain ....NetApp .... Look, stop being silly. Let's get some organisation and clear thinking here. Starting at, let's see, um, A ....B ....

^{[Chris Mellor.]}