DailyTech - Iomega Accepts EMC's Acquisition Offer, ExcelStor Agreement Defunct

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Hardware Iomega Accepts EMC's Acquisition Offer, ExcelStor Agreement Defunct
Purav Sanghani - April 10, 2008 4:00 PM

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9 comment(s) - last by kyleb2112.. on Apr 11 at 3:01 AM

EMC to try to bring Iomega back up to the big boys club through acquisition

Last month EMC presented a revised acquisition offer to Iomega to purchase Iomega's shares at $3.75 each. The offer would value the company at roughly $205.5 million which seemed reasonable as Iomega's stock price was fluctuating around that point at the time.

Since that last offer, Iomega's stock price has increased roughly 1/5 point, which is good for Iomega as it has accepted EMC's latest offer to buy out the well-known storage device company for a $0.20 premium over last months offer.

EMC and Iomega have announced an agreement for EMC to acquire Iomega for $3.85 per outstanding share valuing the company at about $213 million, about $7 million higher to cover the cost of Iomega's ExcelStor purchase contract termination. As previously stated, If Iomega decided to accept an offer from EMC, the purchase agreement between Iomega and China-based ExcelStor would be voided.

In light of the acquisition, EMC hopes to utilize Iomega's storage technologies to target the consumer and small business market in conjunction with EMC's data backup software solutions including Retrospect and LifeLine.

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iomega still exists?

By Gul Westfale on 4/10/2008 5:22:10 PM , Rating: 2

i thought they had gone bankrupt/were acquired a long time ago... they had bad timing with their zipdrives, or perhaps no forethought. at the time of its release it should have been obvious that CDs would soon surpass zip disks, due to a slab of plastic simply being cheaper to make than a zip disk, and of course very user already has a CD drive in their PC. then they stuck with the format for too long, never really lowered prices, and tried to introduce at least two portable hard drive-with docking-bay systems, that were also overpriced and too bulky.

why exactly such a company would be worth over $200m is a bit weird, do they have some important patents relating to relevant storage tech?

RE: iomega still exists?

By RamboZZo on 4/10/2008 5:37:25 PM , Rating: 2

Thats interesting. Just a few days ago looking through my old junk drawer I found and old zip drive and disks and was wondering whatever became of Iomega. Guess I know now. I think their products back then had some promise but indeed their silly high prices that never seemed to go down coupled with proprietary design pretty much guaranteed it would never catch on.

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RE: iomega still exists?

By Locutus465 on 4/10/2008 5:47:45 PM , Rating: 2

I'm just wondering what storage technologies they're planning on capitolizing on... Zip seemed like the heir apparent to floppy for a long time (I even still have an ATIP Zip drive in my PC still).. But Iomega just let Zip fall appart... I don't think they have any storage tech unique to them any more do they?

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RE: iomega still exists?

By borismkv on 4/10/2008 6:03:11 PM , Rating: 2

Yes, see below.

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RE: iomega still exists?

By Samus on 4/11/2008 2:59:49 AM , Rating: 2

The Iomega REV drive is still a great backup solution. It's actively supported and the new REV2 just came out that does something like 140GB uncompressed.

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RE: iomega still exists?

By Curelom on 4/10/2008 5:53:30 PM , Rating: 2

They never went bankrupt and were never acquired. They sell lots of HDDs(mostly in Europe), among other backup products such as REV drives.

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RE: iomega still exists?

By borismkv on 4/10/2008 6:02:09 PM , Rating: 3

iomega moved into backup systems after ZIP disks fell off the market of usefulness. Their current, most popular offering is the REV drive system, which is technically superior to tape backup, but has a number of driver errors. It's very similar to a ZIP disk, but holds upwards of 74GB of data as opposed to 100megs. So no, iomega hasn't been in the consumer space for quite some time, but they've remained fairly steady in the business backup market since their inception.

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RE: iomega still exists?

By Curelom on 4/10/2008 6:30:43 PM , Rating: 2

They just came out with a REV drive that hold 120GB each cartridge. I don't know anything about driver errors. I imagine they would have fixed any by now. They also sell an eGo drive that I think looks a little like a flask.

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Jaz Drives

By kyleb2112 on 4/11/2008 3:01:03 AM , Rating: 2

Anyone else get screwed by the Jaz Drive? I bought 5 at once for my small business in the 90s. Over the entire warranty period they lived at Iomega's repair facility. When the warranty ran out, Iomega said tough luck--no refunds, no more repairs. I've been praying for their death ever since.