Posted by: Dave Raffo
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EMC today moved to outbid NetApp for Data Domain, offering $30 per share for the data depulication backup specialist – less than two weeks after NetApp offered $25 per share.
EMC’s offer is worth $1.8 billion, compared to NetApp’s $1.5 billion. Data Domain’s stock closed at $26.35 today.
In making the offer, EMC made it clear that it thinks the world of Data Domain, around a year after it struck an OEM deal with Quantum to compete with Data Domain in the target backup dedupe market.
“EMC has made this offer to acquire Data Domain for its fast-growing revenue base, its strong data protection-focused management team and sales force and its highly complementary storage software technology that will help to accelerate both companies’ ability to deliver industry-leading next-generation disk-based backup and archiving solutions for customers,” EMC said in its release announcing its offer.
EMC also made public a letter from CEO Joe Tucci to Data Domain CEO Frank Slootman, claiming EMC’s offer is better because it is a 20% premium to NetApp’s offer, an all-cash offer compared to NetApp’s cash and stock offer, and would close quicker because it is structured as a tender offer.
Tucci is also trying to tempt Slootman with the vendor’s size and scope, claiming EMC could use Data Domain to turn disk-based backup into a $1 billion business within a year. “We will maintain the senior management team under your leadership and operate Data Domain as a product division within EMC,” Tucci wrote to Slootman. “As a part of EMC, Data Domain will have access to EMC’s superior global resources and we will enhance this division with additional EMC technology, products and capital.”
Tucci also said in the letter, “We are disappointed that we were not given an opportunity to explore a business combination prior to the announcement of your proposed transaction with NetApp, particularly since I believe you should have been aware of our interest.”
Data Domain has approved NetApp’s offer although the deal isn’t expected to close until late summer. Data Domain declined comment on EMC’s offer and NetApp has not responded to a request for comment.