Press release
- Isilon is a leader in the fast-growing Scale-out Network Attached Storage segment
- Combined revenue from Isilon and EMC Atmos is expected to reach $1 billion run-rate during second half of 2012
- Acquisition expected to be accretive to EMC's non-GAAP EPS in 2011
HOPKINTON, Mass. and SEATTLE, Wash. - EMC Corporation (NYSE: EMC) today announced the signing of a definitive agreement under which it will acquire Isilon Systems, Inc. (Nasdaq: ISLN), a fast-growing "Scale-out NAS" (network attached storage) systems company, based in Seattle, Washington. Under terms of the agreement, EMC will pay $33.85 per share in cash in exchange for each share of Isilon for an aggregate purchase price of approximately $2.25 billion, net of Isilon's existing cash balance.
The boards of directors of both EMC and Isilon have unanimously approved the terms of the agreement. The transaction, which is subject to customary approvals, is expected to be completed late this year, is not expected to have a material impact to EMC's full-year 2010 GAAP and non-GAAP diluted EPS and is expected to be accretive to EMC's non-GAAP 2011 diluted EPS.
Isilon is known as the leader and momentum player in the fast-growing "Scale-out NAS" segment, which IDC projects will grow on average approximately 36% annually reaching an estimated $6 billion dollars in 2014(1). Together, EMC's Atmos and Isilon's solutions will offer customers a highly scalable, low-cost storage infrastructure for managing "Big Data." Big Data is a term used to describe the massive amount of data produced by a new generation of applications in markets such as life sciences (e.g. gene sequencing), media and entertainment (e.g. online streaming), and oil and gas (e.g. seismic interpretation) to name a few.
Isilon's scale-out NAS systems are designed to begin small and scale quickly and non-disruptively up to 10 petabytes in size, with extremely high levels of performance and availability. EMC 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 provide customers a complete storage infrastructure solution for managing "Big Data" in private or public cloud environments. EMC expects the combined revenue of these two highly complementary storage offerings to reach a $1 billion run-rate during the second half of 2012.
Joe Tucci, Chairman and CEO, EMC Corporation, said, "The unmistakable waves of cloud computing and ‘Big Data' are upon us. 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, sits at the intersection of these trends with leading products, solutions and services to help customers get the absolute most out of what cloud computing has to offer."
Pat Gelsinger, President and COO, EMC Information Infrastructure Products, said, "EMC brings unique value to Isilon through our highly complementary portfolio, engineering depth, financial strength and global sales reach. Isilon will enable EMC to accelerate our storage revenue growth and serve our customers across a broader range of the storage systems market. EMC will invest in all aspects of Isilon's business to accelerate growth and take advantage of the fast-growing market opportunity ahead."
Sujal Patel, CEO of Isilon, said, "Our excitement about the opportunity to become part of EMC's world-class team cannot be overstated. EMC's track record of successfully acquiring, integrating and growing leading companies and the complementary nature of our technologies are undeniable. I am most excited about Isilon's ability to now leverage EMC's unparalleled market reach and portfolio of leading technology assets to build on our already significant success in this fast-growing space. 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."
In connection with this announcement, EMC is reaffirming all of its previously issued business outlook for 2010 that it released on October 19, 2010, including the following: For 2010, EMC expects consolidated revenues of $16.9 billion, $0.91 in consolidated GAAP diluted earnings per share, and $1.25 in consolidated non-GAAP diluted earnings per share, which excludes the impact of restructuring and acquisition-related charges, stock-based compensation expense, and intangible asset amortization. For 2010, consolidated restructuring and acquisition-related charges, stock-based compensation expense, and intangible asset amortization are expected to be $0.02, $0.23 and $0.09 per diluted share, respectively.
Full details of EMC's consolidated business outlook for 2010 may be found at http://www.emc.com/about/news/press/2010/20101019-earnings.htm.
