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Non-Tech : Iomega Thread without Iomega
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To: Bill Lin who wrote (234)6/29/1998 12:58:00 PM
From: dale velkovitz  Read Replies (1) of 10072
 
<This $21mm is expected to return how much profit?>

It is a bit unclear what the actual purchase price for Nomai is. According to the AP Story:

<<Iomega agreed to purchase 53 percent of Nomai's stock for $21 million. In addition, Iomega will purchase ''certain technology'' owned by Nomai for another $3 million.>>

If this is correct, since IOM is required to tender for the remainder of the public shares as well, the total amount paid to Nomai and its shareholders would be approximately $42.6 million. Nomai is on a 6/30 fiscal year end and the deal is being accounted for as a purchase, so there shouldn't be any impact on the IOM books this quarter. Next quarter the impact on the financials will depend on how much of the purchase price IOM assigns to "technology in process" and "restructuring costs". As of the latest financials available on the Nomai website, Nomai had a total bookvalue of around $8.4 million, subsequent to that date they have raised some additional capital and most likely have incurred substantial operating losses as well, so in all likelyhood the bookvalue acquired will be substantially less than the purchase price meaning that IOM will either book a large amount of goodwill or a large amount of writeoffs for "technology in process".
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