SUNNYVALE, CA--(Marketwire - June 3, 2009) - NetApp (
NASDAQ:
NTAP) today announced that it
has made a revised proposal to acquire Data Domain (
NASDAQ:
DDUP). Under
the terms of the proposal, a copy of which is attached, NetApp will acquire
all of the outstanding shares of Data Domain common stock for $30 per share
in cash and stock in a transaction valued at approximately $1.9B, net of
Data Domain's cash, subject to certain adjustments.
"Our strategic rationale remains the same and we firmly believe that the
combination of our two companies will provide a greater opportunity and
risk-adjusted value for Data Domain shareholders, customers, and partners,"
said Dan Warmenhoven, chairman and CEO of NetApp. "The complementary nature
of the Data Domain and NetApp product lines will result in higher aggregate
growth compared to the redundancies that would result with the EMC product
line."
The Data Domain portfolio provides NetApp a complementary offering to
expand its reach in the market for heterogeneous disk-based backup. The
Data Domain acquisition will increase NetApp's ability to capitalize on the
growth of disk-based backup adoption, a trend accelerated by the economics
of deduplication.
NetApp's offer for Data Domain is also superior to EMC's previously
announced, unsolicited proposal, as it offers a combination of value
certainty and the opportunity for Data Domain shareholders to participate
in the future success of the combined NetApp and Data Domain entity.
Warmenhoven added, "The cultural compatibility between Data Domain and
NetApp will maximize the potential for continued innovation from a creative
and motivated employee base. This will not only create a meaningful choice
for our customers but also lead to a complementary combination with no
obstacles to an expeditious close of the acquisition. Therefore, we are as
committed to this partnership now as we were when we first announced our
intent to acquire Data Domain."
NetApp first announced its definitive agreement to acquire Data Domain on
May 20, 2009. For complete details on this acquisition, visit the page
NetApp to Acquire Data Domain
(
http://www.netapp.com/us/company/news/announcement-20090520.html) or
www.netapp.com.
Forward-Looking Statements
This press release contains forward-looking statements, which involve a
number of risks and uncertainties. NetApp and Data Domain caution readers
that any forward-looking information is not a guarantee of future
performance and that actual results could differ materially from those
contained in the forward-looking information. All such forward-looking
statements include, but are not limited to, statements about the benefits
of NetApp's acquisition of Data Domain, including future financial and
operating results, NetApp's plans, objectives, expectations and intentions
and other statements that are not historical facts.
The following factors, among others, could cause actual results to differ
from those set forth in the forward-looking statements: the ability to
obtain regulatory approvals of the transaction on the proposed terms and
schedule; the failure of Data Domain stockholders to approve the
transaction; the risk that the businesses will not be integrated
successfully; the risk that the cost savings and any other synergies from
the transaction may not be fully realized or may take longer to realize
than expected; disruption from the transaction making it more difficult to
maintain relationships with customers, employees or suppliers; and
competition and its effect on pricing, spending, third-party relationships
and revenues. Additional factors that may affect future results are
contained in NetApp's and Data Domain's filings with the SEC, which are
available at the SEC's web site
http://www.sec.gov. NetApp and Data Domain
disclaim any obligation to update and revise statements contained in these
materials based on new information or otherwise.
Additional Information and Where to Find It
NetApp plans to file with the SEC a Registration Statement on Form S-4 in
connection with the transaction, and Data Domain plans to file with the SEC
and mail to its stockholders a Proxy Statement/Prospectus in connection
with the transaction. The Registration Statement and the Proxy
Statement/Prospectus will contain important information about NetApp, Data
Domain, the transaction and related matters. Investors and security holders
are urged to read the Registration Statement and the Proxy
Statement/Prospectus carefully when they are available. Investors and
security holders will be able to obtain free copies of the Registration
Statement and the Proxy Statement/Prospectus and other documents filed with
the SEC by NetApp and Data Domain through the web site maintained by the
SEC at
www.sec.gov and by contacting NetApp Investor Relations at (408)
822-7098 or Data Domain Investor Relations at (408) 980-4909. In addition,
investors and security holders will be able to obtain free copies of the
documents filed with the SEC on NetApp's website at
www.netapp.com and on
Data Domain's website at
www.datadomain.com.
Participants in the Acquisition of Data Domain
NetApp, Data Domain and their respective directors, executive officers and
certain other members of management and employees may be deemed to be
participants in the solicitation of proxies in respect of the proposed
transaction. Information regarding these persons who may, under the rules
of the SEC, be considered participants in the solicitation of Data Domain
stockholders in connection with the proposed transaction will be set forth
in the Proxy Statement/Prospectus described above when it is filed with the
SEC. Additional information regarding NetApp's executive officers and
directors is included in NetApp's definitive proxy statement, which was
filed with the SEC on July 14, 2008, and additional information regarding
Data Domain's executive officers and directors is included in Data Domain's
Annual Report on Form 10-K/A for fiscal year ended December 31, 2008, which
was filed with the SEC on April 30, 2009. You can obtain free copies of
these documents from NetApp or Data Domain using the contact information
above.
About NetApp
NetApp creates innovative storage and data management solutions that help
our customers deliver outstanding cost efficiency and accelerate business
breakthroughs. Discover our passion for helping companies around the world
go further, faster at
www.netapp.com.
June 2, 2009
Aneel Bhusri
Chairman of the Board of Directors
Data Domain, Inc.
2421 Mission College Boulevard
Santa Clara, CA 95054
Dear Aneel:
On behalf of NetApp, I am pleased to reiterate our continued interest and
enthusiasm for a potential combination of Data Domain and NetApp. As you
know, we believe that a combination has the potential to create a combined
company that is unparalleled in its position to add real value for our
customers by solving their storage efficiency needs.
In light of EMC's recently announced unsolicited proposal to acquire Data
Domain, we would like to propose a revised transaction between NetApp and
Data Domain which we believe offers Data Domain's stockholders a superior
combination of risk-adjusted value and transaction certainty than EMC's
unsolicited acquisition proposal.
Pursuant to the terms of the attached amendment to our existing Agreement
and Plan of Merger (the "Merger Agreement"), we are proposing to revise the
Merger Agreement to deliver $30 per share in total value to Data Domain
stockholders, consisting of $16.45 per share in cash (before any
adjustments described in Sections 2.7(b)(i) and 2.7(b)(ii) of the Merger
Agreement) and $13.55 per share in NetApp stock based on NetApp's closing
share price on June 2, 2009 of $19.34. As with the terms of our existing
Merger Agreement, our amended Merger Agreement would include a 10%
symmetrical collar, centered on a midpoint derived from NetApp's closing
share price of $19.34. Accordingly, the exchange ratio for the stock
component of the merger consideration set forth in the amended Merger
Agreement would be equal to (i) 0.7783 shares of NetApp common stock if the
"Closing Average" (as defined in the Merger Agreement) is less than $17.41,
(ii) 0.6370 shares of NetApp common stock if the "Closing Average" is
greater than $21.27, and (iii) that fraction of a share of NetApp common
stock equal to the quotient obtained by dividing $13.55 by the "Closing
Average", if the "Closing Average" is (A) less than or equal to $21.27 and
(B) greater than or equal to $17.41. In order to maximize deal certainty,
NetApp would expect to use cash to settle the low end of the collar. Under
the terms of our proposal, all other terms of the amended Merger Agreement
would remain unchanged from those set forth in the existing Merger
Agreement.
We believe this proposal offers Data Domain stockholders more compelling
risk-adjusted value than EMC's current acquisition proposal for several
reasons. First, it offers a combination of value certainty -- through the
cash and the collar -- coupled with the potential for long-term value
upside through the ongoing ownership of NetApp stock. Second, the stock
portion of the transaction consideration is expected to be tax-free to Data
Domain stockholders. And third and potentially most important, we believe
that a combination of Data Domain and NetApp offers clearly superior
transaction certainty. Unlike a combination of Data Domain and EMC, which
has substantial product overlap and which we believe will face significant
regulatory challenges, a combination of Data Domain and NetApp has no
meaningful regulatory risk.
We look forward to discussing the terms of this proposal in greater detail
at your earliest convenience. For your convenience and to express the
sincerity of our intent, we have included a signed copy of our proposed
amendment to the Merger Agreement. We note, however, that this proposal and
the Merger Agreement amendment attached hereto are non-binding and we
reserve the right to withdraw this proposal and the Merger Agreement
amendment at any time unless and until the signed copy of the Merger
Agreement amendment attached hereto is counter-signed by Data Domain and
returned to us without any revisions thereto. Any purported revisions to
the attached Merger Agreement amendment shall not be accepted by us and
shall be considered void, notwithstanding the execution thereof by Data
Domain.
Sincerely,
Steven Gomo