Iomega to buy China-gov't owned storage maker

Iomega plans to buy Chinese ExcelStor in a stock deal

Storage hardware vendor Iomega has signed a deal to buy sister hardware vendors indirectly owned by the Chinese government, in an effort to expand the company's product line.

Iomega will purchase ExcelStor Great Wall Technology, a Cayman Islands company, and Shenzhen ExcelStor Technology, a Chinese company, in a stock deal expected to close in mid-2008, said Thomas Kampfer, Iomega president and chief operating officer. The deal would nearly quadruple the size of Iomega, with its revenue going from US$300 million a year to about US$1.1 billion a year, and the number of employees growing from less than 300 to about 3,000, Kampfer said.

ExcelStor has built Iomega's Rev removable hard drive products since 2004, and more recently, it has built Iomega-branded USB hard drives, Kampfer said. The acquisition will help Iomega branch out into new products, he said, although the company isn't yet announcing what new products it's looking at.

"For quite some time ... we've felt that we have a really great brand," Kampfer said. "We've been searching for ways to expand our product line and gain access to more products, to move ourselves beyond external storage. We haven't had the resources -- we haven't had the development resources, we haven't had the marketing resources. We just aren't big enough."

In the deal, Iomega will issue about 84 million shares of its stock, worth about US$139 million, in exchange for all outstanding ExcelStor shares. The deal would be one of the first times a U.S. company has acquired a company owned by the Chinese government, according to Iomega.

The boards of directors at both Iomega and ExcelStor have approved the deal. The purchase must be approved by the Chinese government and shareholders.

ExcelStor, which produces more than 20 million devices a year, designs and manufactures digital storage hardware, including hard drives and security storage products. The company sells its products under its own brand and also to original equipment manufacturers.

In 2006, ExcelStor had revenue of US$707.1 million, according to Iomega.

ExcelStor is a subsidiary of Great Wall Technology Co. (GWT), a publicly traded company that manufactures computers and creates software and related products. GWT is an indirect subsidiary of China Electronics, which is owned by the Chinese government.

After the deal is completed, GWT and its affiliates will own about 43 percent of Iomega's stock, making GWT its largest shareholder. China Electronics indirectly owns 62 percent of GWT.

Jonathan Huberman will continue as CEO of Iomega, and Kampfer will remain as president and COO, the company said. Eddie Lui, currently CEO of ExcelStor, will become executive chairman of Iomega.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?