EMC to buy Iomega

BIG IRON enterprise storage hardware, software and services vendor EMC announced Tuesday that it's buying Iomega for $213 million or $3.85 per share.

Hopkinton, Massachusetts based EMC earlier offered $178 million, or $3.25 per share, for the smaller company. Iomega, headquartered in San Diego, California, had rejected that bid in favour of an all-stock deal with China's ExcelStor Group. EMC's successful bid is 5.8 per cent over Iomega's Tuesday stock closing price of $3.64. In accepting EMC's higher offer, Iomega said it paid a termination fee of $7.5 million to ExcelStor.

Iomega was a high flyer during the dot-com boom with its stock trading for over $100 per share. Its external removable disk Jazz drives were a backup solution in the '90s, but they suffered some reliability problems that led to the term "click of death." This writer still has an Iomega Jazz drive along with its cable and PCMCIA SCSI card -- in a box, out in his garage.

Iomega's Zip drive has proven more reliable, and Iomega still sells it. It also sells external and removeable hard drives as well as network attached storage (NAS) products, and it has branched out to offer managed security and data recovery services. EMC is looking for Iomega to help it extend its sales reach into small and medium sized businesses.

There's more about this transaction here. µ