EMC has agreed to purchase the assets and network attached storage (NAS) technology of Isilon Systems for approximately $2.25 billion. The transaction should be completed by the end of the year, but if the deal falls apart, EMC has agreed to a $100 million “breakup fee.”
Under terms of the agreement, EMC will pay $33.85 per share in cash in exchange for each share of Isilon. The boards of directors of both EMC and Isilon have unanimously approved the terms of the agreement.
During the third quarter, Isilon posted net income of $4 million on revenue of $53.8 million. EMC said it predicts the combined revenue of the two organizations’ complementary storage offerings will reach a $1 billion run-rate during the second half of 2012.
Isilon’s NAS systems are designed to begin small and scale quickly and nondisruptively up to 10PB in size, with extremely high levels of performance and availability. EMC’s Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.
Together, Isilon and EMC Atmos represent a complete storage infrastructure solution for managing video-rich content in private or public cloud environments.
Joe Tucci, chairman and CEO, EMC, said customers are looking for new ways to store, protect, secure and add intelligence to the vast amounts of information they will accumulate over the next decade. EMC, in combination with Isilon, will offer new ways to do that easily and efficiently.
Pat Gelsinger, president and COO, EMC Information Infrastructure Products, said the acquisition of Isilon will enable EMC to accelerate its storage revenue growth and serve a broader range of customers looking for scalable storage systems. He said EMC would invest in all aspects of Isilon’s business to take advantage of emerging market opportunities.
Stating that his excitement about the acquisition “cannot be overstated,” Sujal Patel, CEO and co-founder of Isilon, who has been responsible for its turnaround since returning in 2007, said, “Together, Isilon and EMC are ideally positioned to take our company to the next level and accelerate Isilon’s growth and technology adoption by customers around the world.”
Isilon has 1500 employees around the world and a customer list that includes Kodak, NBC and Sony, that all use the company's products to store 3-D graphics, audio and video files, and more.