EMC is offering $3.85 per share for Iomega stock and expects to complete the deal by the end of June. The storage company said the purchase would have no material impact on EMC's financial results for the current fiscal year.
Joe Tucci, EMC chairman, president and chief executive, said the acquisition would 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."
"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," Tucci said in a statement.
Iomega sells external hard drives, network-attached storage devices, the Zip floppy disk drives and multimedia drives for storing video and photos, so they can be watched on a TV. Once these and other Iomega products are folded into EMC, the smaller company will be able leverage EMC's global sales channels, Jonathan Huberman, chief executive of Iomega, said. "EMC brings to Iomega a new opportunity for accelerated innovation that will translate into new product capabilities for Iomega's extensive customer base."
Iomega's technology, organization, brand, products and partner ecosystem will form the core of an EMC Consumer/Small Business Products Division, which will also be responsible for EMC Retrospect and Lifeline backup software. Huberman, who will report to Joel Schwartz, senior VP and general manager of EMC Storage Platforms, will lead the new division.
The Iomega deal follows by six months EMC's acquisition of online backup service Mozy, which served consumers and small and midsize companies. EMC bought Mozy through the acquisition of its parent company Berkeley Data Systems. The Mozy subscription service had 300,000 customers and provided backup for desktops, laptops and remote-office servers.
EMC has since taken Mozy to the enterprise, running the backup technology on EMC's storage-as-a-service platform EMC Fortress. While the new service could backup small servers, experts say it was best used to protect data on laptops and desktops. EMC in February raised the price of its MozyPro product used by SOHO customers by up to 300%.