EMC buys Iomega for $213 million

Data storage provider EMC Corp. said Tuesday it would acquire Iomega Corp. for $213 million, expanding EMC’s offerings targeting small businesses and consumers.

The price is a 20 percent increase over EMC’s initial bid of $178 million, or $3.25 per share. Iomega, a San Diego-based storage company best known for the Zip drive, had rejected that offer earlier this year, calling it inferior to a proposed all-stock transaction that Iomega had reached in December with a stockholder.

Hopkinton, Mass.-based EMC came back with a $3.75-per-share offer totaling $206 million. Further talks led to Tuesday’s all-cash agreement at $3.85 per share, which is 5.8 percent higher than Iomega’s Tuesday closing price of $3.64.

With Iomega’s acceptance of EMC’s bid, Iomega said it paid a termination fee of $7.5 million to the shareholders in the canceled deal. (link)

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