Updated at 2:30 p.m. PDT with comments from Iomega Chief Executive Jonathan Huberman.
And now for something completely different.
Software and storage company EMC announced Tuesday that it will purchase Iomega for $213 million, or $3.85 per share. EMC expects the deal to close sometime during the second quarter of this year.
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 CNET News.com Tuesday. "We have strong brand and channel presence in business and consumer (markets), but what we do lack is scale."
Iomega earned $336 million in sales in 2007, while EMC did more than $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 organization."
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.