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EMC wins battle for Data Domain; NetApp gets $57M breakup fee

Data Domain

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A bidding war over data storage company Data Domain (Nasdaq: DDUP) is over, with EMC (NYSE: EMC) emerging as the victor.

Data Domain Inc. said Wednesday that it has agreed to be acquired by EMC Corp. for $33.50 per share in cash. The company has ended its agreement to be acquired by NetApp Inc. (Nasdaq: NTAP) and paid a $57 million breakup fee.

NetApp said it has decided not to revise its buyout offer of $30 per share in cash and stock for Data Domain.

“While NetApp’s acquisition of Data Domain would have produced benefits for customers and employees and complemented NetApp’s existing growth trajectory, we remain highly confident in our already compelling strategic plan, market opportunities, and competitive strengths,” said Dan Warmenhoven, NetApp’s chairman and chief executive officer, in a statement.

“NetApp applies a disciplined approach to acquisitions, one focused intently on creating long-term value for our stockholders," he added. "We therefore cannot justify engaging in an increasingly expensive and dilutive bidding war that would diminish the deal’s strategic and financial benefits.”

Some analysts had predicted EMC, with much larger stashes of capital and cash, would win the bidding war.

EMC has a market cap of more than $25 billion; NetApp is valued at just over $6 billion.

“NetApp has established leadership positions in virtualized infrastructure, storage efficiency, and unified storage, even in these difficult economic times, by helping customers meet their business objectives with less physical storage while reducing costs. That commitment will not change," NetApp's CEO, a former resident of the Triangle, said. "We look forward to continuing to build on our foundation of innovation and customer service, and to continuing to execute our successful growth strategy.”

Data Domain's storage systems dramatically cut down on the amount of disk storage needed to retain business data by identifying redundant files as they are being stored. NetApp and EMC make products that store data.

All three companies have significant operations in the Research Triangle Park area.