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To outfox EMC, NetApp ups Data Domain offer to US$1.9 billion
- — 04 June, 2009 07:52
The price for Data Domain is going up fast, as NetApp Wednesday morning tried to outspend EMC by offering US$1.9 billion to purchase the storage company.
This could be the start of a contentious battle involving rivals EMC and NetApp, which have both publicly announced their interest in purchasing Data Domain and its de-duplication and backup technology.
On May 20, NetApp announced a US$1.5 billion definitive agreement to purchase Data Domain, saying one of the goals of the acquisition was to provide backup for systems made by competitors such as EMC and HP.
EMC fired back on Monday this week with a $1.8 billion offer, saying that ownership of Data Domain could give EMC more than $1 billion in revenue next year from the sizable de-duplication market.
"We didn't just wake up one day and say maybe this is a good thing to do. We've had our eye on Data Domain and obviously somebody moved before we did," EMC CEO Joe Tucci said. "Even in stand-alone mode, you're seeing projection of this company doing $480 million in revenue next year. We think we can grow it faster."
NetApp did not back off, instead raising its offer Wednesday to $30 per share, or $1.9 billion.
"Our strategic rationale remains the same and we firmly believe that the combination of our two companies will provide a greater opportunity and risk-adjusted value for Data Domain shareholders, customers, and partners," NetApp Chairman and CEO Dan Warmenhoven said in an announcement. "The complementary nature of the Data Domain and NetApp product lines will result in higher aggregate growth compared to the redundancies that would result with the EMC product line."
NetApp claimed its offer is "superior" to EMC's because it offers an "opportunity for Data Domain shareholders to participate in the future success of the combined NetApp and Data Domain entity."