sc14d9a.htm
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
________________________________
SCHEDULE
14D-9
(Rule
14d-101)
Solicitation/Recommendation
Statement Under
Section
14(d)(4) of the Securities Exchange Act of 1934
(Amendment
No. 2)
________________________________
IOMEGA
CORPORATION
(Name of
Subject Company)
IOMEGA
CORPORATION
(Name of
Person(s) Filing Statement)
Common
Stock, $0.03-1/3 par value per share
(including
associated preferred stock purchase rights)
(Title or
Class of Securities)
462030305
(CUSIP
Number of Class of Securities)
________________________________
Jonathan
Huberman
Chief
Executive Officer
Iomega
Corporation
10955
Vista Sorrento Parkway
San
Diego, California 92130
(858)
314-7000
(Name,
address and telephone number of person authorized
to
receive notices and communications on behalf of the person(s) filing
statement)
________________________________
With
Copies to:
Deyan
Spiridonov, Esq.
Paul,
Hastings, Janofsky & Walker LLP
3579
Valley Centre Drive
San
Diego, California 92130
(858)
720-2590
[ ]
Check the box if the filing relates solely to preliminary communications made
before the commencement of a tender offer.
This Amendment No. 2 amends and
supplements Item 4 in the Solicitation/Recommendation Statement on Schedule
14D-9 initially filed with the Securities and Exchange Commission (the
“SEC”) on April 24, 2008 (the “Initial
Schedule 14D-9”), as
amended and supplemented by Amendment No. 1 thereto filed with the SEC on May
12, 2008 (“Amendment
No. 1” and, collectively
with the Initial Schedule 14D-9, the “Schedule
14D-9”), by Iomega
Corporation, a Delaware corporation (“Iomega” or the “Company”), relating to the tender offer (the
“Offer”) made by Emerge Merger Corporation, a
Delaware corporation (“Purchaser”), and a wholly owned subsidiary of
EMC Corporation, a Massachusetts corporation (“EMC”), to acquire all of the issued and
outstanding shares of common stock of the Company, par value $0.03-1/3 per share
(the “Shares”), including the rights associated
with the Shares pursuant to the rights agreement dated July 29, 1999,
between Iomega and American Stock
Transfer and Trust Company, as amended, at a price of $3.85 per Share in cash,
without any interest thereon, and less any required withholding taxes, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
April 24, 2008 (together with any amendments or supplements thereto, the
“Offer to
Purchase”), and the
related Letter of Transmittal (together with any amendments or supplements
thereto, the “Letter of
Transmittal”).
The Offer
is being made on the terms and subject to the conditions set forth in the
Agreement and Plan of Merger, dated as of April 8, 2008 (the “Merger Agreement”),
by and among Purchaser, EMC and Iomega. The Merger Agreement
provides, among other things, for the making of the Offer and, subject to the
satisfaction or waiver of the conditions set forth in the Merger Agreement, the
merger of Purchaser into the Company (the “Merger”), with the
Company surviving as a wholly owned subsidiary of EMC. The
consummation of the Offer is conditioned on, among other things, Purchaser’s
receiving through the Offer at least a majority of the outstanding Shares on a
fully diluted basis (which means, as of any time, the number of Shares
outstanding plus all Shares, if any, which the Company would be required to
issue pursuant to any then-outstanding options to acquire
Shares). The Offer is described in greater detail in the Tender Offer
Statement on Schedule TO, dated April 24, 2008 and filed with the Securities and
Exchange Commission on April 24, 2008, to which the Offer to Purchase and Letter
of Transmittal are exhibits.
Except as
otherwise indicated, the information set forth in the Schedule 14D-9 remains
unchanged. All information in the Schedule 14D-9 is incorporated by
reference in this Amendment No. 2, except that such information is hereby
amended and supplemented to the extent specifically provided
herein.
Item
4. The Solicitation or Recommendation
Item 4(b) “Background and Reasons for
the Recommendation – Background of the Transaction” of the Schedule 14D-9 is
hereby amended and supplemented as follows:
·
|
By
adding the following paragraph immediately after the last paragraph under
the subsection captioned “Historical Background” and immediately before
the subsection captioned “The Transaction with ExcelStor and the Selling
Shareholders” (please
refer to page 14 of the Initial Schedule
14D-9):
|
Throughout 2007, the Company’s
management also contacted at least eight other companies,both public and
private, in addition to ExcelStor (as defined below) and EMC (as further
described below), to assess their interest in a possible strategic transaction
with the Company. None of these contacts resulted in an offer to
purchase or merge with the Company.
Item 4(b) “Background and Reasons for
the Recommendation – Reasons for the Recommendation” of the Schedule 14D-9 is
hereby amended and supplemented as follows:
·
|
By
adding the following paragraphs immediately after the penultimate bulleted
paragraph and immediately before the final bulleted paragraph under the
subsection captioned “Potential Strategic Alternatives; Superiority Over
ExcelStor Transaction” (please refer to page 23 of the
Initial Schedule 14D-9):
|
the
increasing uncertainty with respect to the PRC regulatory approvals required in
the ExcelStor Transaction, which involved the overlapping jurisdiction of
multiple government ministries and agencies, including, but not limited to, the
Ministry of Commerce, the China Securities Regulatory Commission, the State
Administration of Industry and Commerce, the State Administration of Foreign
Exchange, the National Development and Reform Commission and the State-owned
Assets Supervision and Administrative Commission;
the fact
that these PRC regulatory approvals were not required to be provided on any
defined, identified timeline;
the fact
that the ExcelStor Transaction involved PRC government-controlled entities and
as such was subject to the Exon-Florio Amendment of the United States Defense
Production Act of 1950, as amended (the “Exon-Florio
Amendment”), which requires notification of and review by the Committee
on Foreign Investment in the United States, as compared to the fact that the
transactions with EMC contemplated by the Merger Agreement are not subject to
the Exon-Florio Amendment; and
Item 4(b) “Background and Reasons for
the Recommendation – Opinion of Thomas Weisel Partners” of the Schedule 14D-9 is
hereby amended and supplemented as follows:
·
|
The
subsection captioned “Discounted Cash Flow Analysis” is amended and
restated in its entirety as follows (please refer to page 30 of the
Initial Schedule 14D-9):
|
Thomas Weisel Partners used the
following forecasts of the Company for calendar years 2008 through 2014, as
estimated by the Company’s management, to perform a discounted cashflow
analysis:
Fiscal
Year Ending December 31
|
|
|
|
|
2008 |
E |
|
|
2009 |
E |
|
|
2010 |
E |
|
|
2011 |
E |
|
|
2012 |
E |
|
|
2013 |
E |
|
|
2014 |
E |
Revenues
(in millions)
|
|
$ |
400.0 |
|
|
$ |
432.7 |
|
|
$ |
497.6 |
|
|
$ |
572.2 |
|
|
$ |
658.1 |
|
|
$ |
723.9 |
|
|
$ |
796.3 |
|
EBITDA
(in millions)
|
|
$ |
13.3 |
|
|
$ |
18.9 |
|
|
$ |
23.2 |
|
|
$ |
32.2 |
|
|
$ |
36.9 |
|
|
$ |
44.2 |
|
|
$ |
52.6 |
|
In
conducting this analysis, Thomas Weisel Partners assumed that the Company would
perform in accordance with these forecasts. Thomas Weisel Partners
first estimated the terminal value of the projected cash flows by applying
multiples to the Company’s estimated EBITDA, which multiples ranged from 5.0x to
7.0x. Thomas Weisel Partners then discounted the cash flows projected
and the terminal values to present values using discount rates ranging from
12.0% to 18.0%. Thomas Weisel Partners reviewed the weighted average
cost of capital, or WACC, for comparable companies, which ranged from 10.2% to
17.3%. Thomas Weisel Partners noted that the majority of the comparable
companies had market capitalizations that were significantly larger than the
Company’s and therefore selected the range of discount rates to account for a
risk premium associated with the Company’s lower market capitalization. This
analysis indicated a range of enterprise values, which were then increased by
the Company’s estimated net cash, to calculate a range of equity
values. These equity values were then divided by fully diluted shares
outstanding to calculate implied equity values per share ranging from $3.58 to
$4.45. Thomas Weisel Partners noted that the value of the
consideration to be received by the Company’s stockholders in the Offer and the
Merger was $3.85 per Share.
The
foregoing description is only a summary of the analyses and examinations that
Thomas Weisel Partners deems material to its opinion. It is not a
comprehensive description of all analyses and examinations actually conducted by
Thomas Weisel Partners. The preparation of a fairness opinion
necessarily is not susceptible to partial analysis or summary
description. Thomas Weisel Partners believes that its analyses and
the summary set forth above must be considered as a whole and that selecting
portions of its analyses and of the factors considered, without considering all
analyses and factors, would create an incomplete view of the process underlying
the analyses set forth in its presentation to the Company. In
addition, Thomas Weisel Partners may have given various analyses more or less
weight than other analyses, and may have deemed various assumptions more or less
probable than other assumptions. The fact that any specific analysis
has been referred to in the summary above is not meant to indicate that this
analysis was given greater weight than any other
analysis. Accordingly, the ranges of valuations resulting from any
particular analysis described above should not be taken to be the view of Thomas
Weisel Partners with respect to the actual value of the Company.
In
performing its analyses, Thomas Weisel Partners made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of the
Company. The analyses performed by Thomas Weisel Partners are not
necessarily indicative of actual values or actual future results, which may be
significantly more or less favorable than those suggested by these analyses.
These analyses were prepared solely as part of the analysis performed by Thomas
Weisel Partners with respect to the financial fairness of the consideration to
be received by the Company’s stockholders (other than EMC, Purchaser, the
Company, any subsidiary thereof or any stockholder who demands and perfects
appraisal rights) in the Offer and the Merger, as of the date of Thomas Weisel
Partners’ opinion, and were provided to the Company in connection with the
delivery of the Thomas Weisel Partners opinion. The analyses do not
purport to be appraisals or to reflect the prices at which a company might
actually be sold or the prices at which any securities may trade at any time in
the future.
As
described above, Thomas Weisel Partners’ opinion and presentation were among the
many factors that the Iomega Board took into consideration in making its
determination to approve the Merger Agreement and
the transactions contemplated thereby, and to recommend that the Company’s
stockholders tender their Shares to EMC pursuant to the Offer, approve the
Merger and adopt the Merger Agreement.
The
Company has agreed to pay Thomas Weisel Partners a fee of $2,000,000, a
significant portion of which is contingent upon the completion of the Offer and
the Merger, and includes a fee of $650,000 that was paid upon delivery of the
fairness opinion. The Company was aware of this fee structure and
took it into account in considering the Thomas Weisel Partners opinion and in
approving the Offer and the Merger. Further, the Company has agreed
to reimburse Thomas Weisel Partners for its reasonable out-of-pocket expenses
and to indemnify Thomas Weisel Partners, its affiliates and their respective
partners, directors, officers, agents, consultants, employees and controlling
persons against specific liabilities, including liabilities under the federal
securities laws.
In the
ordinary course of its business, Thomas Weisel Partners actively trades the
equity securities of the Company and EMC for its own account and for the
accounts of customers and, accordingly, may at any time hold a long or short
position in these securities. Thomas Weisel Partners has performed
various investment banking services for the Company, including acting as the
Company’s financial advisor in connection with the Company’s agreement to
acquire 100% of the issued and outstanding equity interests in
ExcelStor. Mr. Michael W. Brown, a director of EMC, is also a
director of Thomas Weisel Partners Group, Inc., the parent company of Thomas
Weisel Partners.
SIGNATURE
After due inquiry and to the best of my
knowledge and belief, I certify that the information set forth in this statement
is true, complete and correct.
Dated:
May 20,
2008 Iomega
Corporation
By: /s/ Jonathan
Huberman
Name: Jonathan
Huberman
Title: Chief Executive
Officer and Vice Chairman