NetApp, the Sunnyvale network storage company that reported its second straight quarterly sales drop Wednesday and its first net loss since 2002, is set to buy itself some growth with the announcement that it has reached a deal to acquire Data Domain, a Santa Clara maker of data-duplication storage appliances used for backing up, archiving and disaster recovery of data.
The deal, which involves an as-yet unspecified combination of cash and stock, reportedly values Data Domain at $25 a share, or $1.5 billion, a 40 percent premium to where Data Domain’s shares closed before the deal was announced Wednesday afternoon. After-hours traders bid up Data Domain shares by $6.39, or 35.5 percent, to $24.30, while shaving 45 cents, or 2.6 percent, off the value of NetApp shares.
Data Domain first offered its shares to the public in June 2007 when it sold 7.4 million of them for $15 a share. About five months later the company sold 6 million more at $27 each. They lost 29 percent in 2008 and lost about 5 percent more so far this year, prior to the deal’s announcement.