EMC to acquire Iomega for $213 million

EMC Corp., the world’s largest maker of storage computers, said Tuesday that it had reached an agreement to buy Iomega Corp. for about $213 million in cash after raising its original bid by almost 20%.

The deal values Iomega at $3.85 a share. Last month, EMC offered $3.25 a share for San Diego-based Iomega, a maker of data-storage products.

Iomega rebuffed that proposal March 10, saying it wasn’t better than a pending purchase agreement with Great Wall Technology Co. A week later, Iomega said EMC’s new bid of $3.75 a share was superior to the Great Wall deal.

EMC Chief Executive Joe Tucci can use Iomega, whose products include Zip drives, to expand into consumer and small-business markets. Iomega, founded in 1980, offers Hopkinton, Mass.-based EMC a “household consumer brand,” Tucci said.

Iomega’s products are distributed to more than 11,500 stores in the Americas, Europe and Asia, according to the company. EMC said it expected the acquisition to close in the second quarter.

Iomega said Tuesday that it paid $7.5 million to terminate its deal with Shenzhen, China-based computer maker Great Wall and ExcelStor Group Ltd.

Iomega’s shares rose more than 4% in after-hours trading Tuesday after falling 4 cents to $3.64 in the regular session. Iomega has gained 14% since March 10, when it disclosed EMC’s initial offer.

Shares of EMC, which have fallen 20% this year, declined 6 cents Tuesday to $14.84