Deals

EMC and NetApp’s battle to buy Data Domain pays off for investors

After an arduous bidding war, electronic storage device maker Data Domain has accepted an offer from network storage and data delivery company NetApp over a nearly identical bid from EMC Corp. It says it prefers NetApp’s lack of a confidentiality agreement and that the terms with EMC were too conditional. But the real winners are Data Domain’s backers, including New Enterprise Associates, Greylock Partners and Sutter Hill Ventures.

Based in Santa Clara, Calif., Data Domain seems to be the gift that keeps on giving for investors. Two years ago, its IPO stunned the market, with share prices jumping 66 percent from the anticipated $15. After sinking just $40 million into the company collectiely, Greylock reaped $338 million, NEA $323 million and Sutter Hill $188 million. While these firms have since sold off some of their stakes, they still stand to benefit greatly from a favorable acquisition.