NetApp to Acquire EMC for $9.5 Billion

NetApp, Inc. and EMC Corp. have entered into a definitive agreement whereby NetApp will acquire EMC in a cash valued at approximately $9.5 billion.

The proposed combination will result in a customer-focused company, with significant operating scale, strong global talent and the industry’s broadest product lineup backed by a rich technology portfolio in storage, virtualization, security and content management.

The transaction has been approved by the board of directors of each company and is expected to close during the fourth calendar quarter of 2011, subject to customary closing conditions, including regulatory approvals.

The resulting company will be named EMC-NetApp. Tom Georgens will remain chief executive officer of NetApp-EMC. EMC’s chairman and chief executive officer will be named President and member of the board of the new company.

"The acquisition of EMC is a unique opportunity for NetApp to create further value for our customers, stockholders, employees, suppliers and the communities in which we operate," said Tom Georgens, president and chief executive officer of NetApp. "We believe this step will result in several key benefits-enhanced R&D capabilities, innovation and expansion of a rich product portfolio, comprehensive market coverage and scale that will enhance our cost structure and ability to compete in a dynamic marketplace. The skills and contributions of both workforces were key considerations in assessing this compelling opportunity. We will be relying on the proven integration capabilities of both companies to assure the ongoing satisfaction of our customers and to bring this combination to successful fruition."

"It’s an excellent operation for our shareholders as the price of the acquisition of EMC, $9.5 billion, is the exact current amount of EMC’s current cash and investments", added Georgens. "Furthermore NetApp is growing at a 25% annual rate and EMC at 17%. Consequently, we hope to grow  revenues of the new company by 42% for the next fiscal year ending April 30, 2012."   

"This brings together two industry leaders with consistent track records of strong execution and industry outperformance," said Joe Tucci, chairman and chief executive officer, EMC. "Together we can provide customers worldwide with the industry’s most compelling and diverse set of products and services."

Tucci comments: "As the former chairman and CEO of EMC, I always believed in the potential of EMC to become a larger and more agile company. This is a strategic combination of two industry leaders, both growing and profitable. It provides an opportunity for the new company to increase customer and shareholder value and expand into new markets."

"In storage, NetApp was historically the leader in NAS and EMC in SAN. The combination of the two companies will increase drastically this leadership," comments Georgens.

NetApp’s exclusive financial adviser on the transaction is Bank of America Merryll Linch; its lead legal adviser is O’Milveny & Myers LLP. Guldman, Sachs & Co serves as financial adviser to NetApp. Legal advisers to EMC are Marrison Foerster LLP and Skidden, Arps, Slate, Meagher & Flom LLP & Affiliates.