Storage and data management vendor NetApp (NASDAQ:NTAP) will acquire data deduplication vendor Data Domain (NASDAQ:DDUP) in a $1.5 billion deal net of Data Domain’s cash—or $25 per share.
NetApp says the deal will benefit the reseller channel partners of both companies, giving Data Domain access to a “more robust and mature channel program” and giving NetApp partners access to Data Domain solutions. The companies note that there is already a significant overlap in the channel partner base of the two companies.
“This is about incremental business opportunity more so than product leverage,” says Jay Kidd, NetApp chief marketing officer, talking to analysts and media following the news announcement.
NetApp touted Data Domain’s “complementary product line, ideally suited for multi-vendor environments where customers want to minimize their use of tape for backup.”
“Net App has the distribution channels and international reach to offer Data Domain products to more customers, accelerating growth and market adoption,” says Dan Warmenhoven, chairman and CEO of NetApp, in a prepared statement.
NetApp will operate Data Domain as a product line within NetApp’s product operations organization. The company says that the Data Domain sales organization will be integrated with NetApp sales to maximize momentum and access to new accounts.
“Our objective will be to amplify Data Domain’s success, grow Data Domain’s revenues as quickly as today’s economy will allow, and create systems and incentives within NetApp to nurture Data Domain to its fullest potential,” Warmenhoven says. “We will focus on new customer acquisition and maximum market share expansion. Their existing customers should see the benefits of NetApp’s broader scale and support capabilities.”
NetApp expects Data Domain revenues to be accretive within the first 12 months.
NetApp says the Data Domain portfolio brings a complementary offering to NetApp, expanding NetApp’s reach in the market for heterogeneous disk-based backup. NetApp says that its heterogeneous backup offering (with its VTL product line) provides installations with disk-based solutions to augment their tape backup infrastructure.
Data Domain’s portfolio will extend NetApp’s ability to compete in the increasing number of installations wanting to minimize their reliance on tape, according to NetApp. The Data Domain acquisition increases NetApp’s ability to capitalize on the growth of disk-based backup adoption, a trend accelerated by the economics of deduplication, according to the company.
The companies expect the deal to close in 60 to 120 days.
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