Iomega to Acquire French Rival Nomai
Iomega Corp. said Monday it will buy out rival Nomai of France for about $44 million, eliminating a potential threat to Iomega’s profitable computer disk business.
Nomai makes a line of high-capacity computer storage disks that rival Iomega’s two main products.
For nearly a year, Iomega fought a pitched battle in Europe and the United States, accusing Nomai of infringing Iomega patents.
As part of the takeover, Nomai agreed to accept Iomega’s patents and settle all lawsuits, Iomega said in a statement Monday.
Roy, Utah-based Iomega said it agreed to buy 53%, or majority control, of Nomai for about $21 million. Iomega will make a tender offer shortly for the remaining Nomai shares, paying another $20 million in cash, Iomega interim CEO James Sierk said.
In addition, Iomega will pay $3 million to acquire technology owned by Nomai that allowed the company to produce its Iomega-compatible data-storage disk products.
The boards of both Nomai and Iomega have approved the deal. The purchase of the majority stake in Nomai is expected to close July 1. No shareholder approval is required, Sierk said.
Sierk said his company will take an undetermined charge against earnings for the third quarter ending in August to cover some of the costs of the purchase.
Iomega is best known for Zip, a computer disk drive that uses disks capable of storing about 100 megabytes of data. It also sells Jaz, a similar system with disks that can store either 1 or 2 gigabytes of data.
Iomega shares rose 44 cents to close at $6.06 on the New York Stock Exchange.