Iomega scoffs at buyout offer from EMC

Iomega received an "unsolicited and inferior proposal" from EMC, one of the world's largest providers of data storage solutions, to purchase the company for approximately $178 million, and has promptly rejected it.

According to Iomega, its board of directors met on March 9 and unanimously determined that EMC's proposal both undervalued the company and contained due diligence contingencies that were too broad. During mergers and acquisitions, due diligence reviews are used to identify and assess business risks.

Thanks to the recent acquisition of ExcelStor, Iomega projected its combined 2008 net revenue to be $400 million.

"We believe that the new Iomega will have the inherent profitability, capital, product development and manufacturing resources and access to global markets to enable us to achieve our ultimate goal of building a thriving global leader in computer peripherals and other consumer electronics products." said Jonathan Huberman, Iomega's CEO, in December after announcing that acquisition.

ExcelStor was founded in 2001 by senior executives from Seagate and Counter Peripherals, and specialized in HDD products, security storage, and external storage hardware. The company was responsible for manufacturing many of Iomega's HDD devices, and was the chief producer of Iomega's REV products.

That company's revenue in 2006 was over $707 million, and upon acquiring ExcelStor, Iomega speculated the combined entity's value to be over one billion dollars.