Data Domain: A 'Hall of Famer' for its Advisers

Gordy Davidson, Dennis DeBroeck and Greg Roussel, partners in the Mergers & Acquisitions Group at Fenwick & West LLP, were recently quoted in The Deal article "Data Domain: A 'Hall Of Famer' For Its Advisers." The acquisition stands as a case study on how challenging it can be to structure a merger agreement and the negotiations leading up to it in a way that doesn't hurt a sought-after target's business prospects while still leaving the door open for a higher bid.

The heated battle for storage technology company Data Domain ultimately resulted in EMC's $2.4 billion acquisition in July 2009, after an initial offer from NetApp, Inc.

The epic battle began when NetApp offered $25 per share in May 2009. "NetApp was trying to put together a really compelling, maybe even pre-emptive, offer," said Fenwick partner and firm chairman Davidson.

Data Domain and its board had not considered the company as up for sale, so it was concerned about keeping the talks under wraps for fear of how it might affect customers' perceptions of the company's future, said Fenwick partner DeBroeck. "If they were in play, it could stall sales completely," he said.

However, after the deal was publicly announced on May 25, EMC stepped in and made a $30 per share all-cash offer on June 1. Two days later, NetApp responded by matching it with a similar $30 per share offer. EMC then boosted its tender offer to $33.50 per share in cash, and two days later, Data Domain accepted the offer successfully sealing the deal.