Software and storage company EMC announced on Tuesday it will purchase Iomega for US$213 million, or US$3.85 per share, giving EMC a foot into the consumer storage market.
EMC has traditionally played in enterprise-level storage and software arenas. Iomega is best-known for hard drives and storage for consumers and small-business customers. EMC hinted that this is just its first move into consumer hardware business.
"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," EMC Chairman, President, and Chief Executive Joe Tucci said in a statement.
Iomega says the acquisition by the larger EMC will enable the company to grow in a way that it currently cannot. "Our markets are adjacent, but not overlapping," Iomega Chief Executive Jonathan Huberman said in an interview with ZDNet.com.au's US sister site CNET News.com on Tuesday. "We have strong brand and channel presence in business and consumer (markets), but what we do lack is scale."
Iomega earned US$336 million in sales in 2007, while EMC did more than US$13 billion in sales worldwide last year.
Once the acquisition is complete, Huberman will lead the newly minted consumer/small-business products division in EMC's storage platforms group. The division will be built completely around Iomega people and brands. Huberman said no decisions have been made on possible staff cuts at Iomega. "But the expectation is that this is about growth," he said. "The vast majority will be coming into the new organisation."
Huberman said a major opportunity for his company at EMC is to take advantage not only of its scale and channel partnerships, but its intellectual property, particularly in the area of networked storage products.
EMC has been on an acquisition tear during the last few years, most recently snapping up Pi, a cloud-computing start-up.
EMC expects the Iomega deal to close sometime during the second quarter of this year.
