Iomega Corp has sold off its high-end Ditto tape drive assets off to Tecmar Technologies International Inc for $3m, citing changes in the portable storage market as the reason. Longmont, Colorado-based Tecmar gets the rights to Iomega’s Ditto 2Gb and Ditto Max products, including the 10Gb Ditto Max Pro and 7Gb Ditto Max drives. Included are intellectual property rights and product rights, including software, media intellectual property rights, tooling, jigs and dies owned by Iomega and the Ditto brand name for tapes and related products.
Ditto product sales have been declining over the last year or so. In the third quarter of 1998, Ditto revenues were $13.2m, or 3.4% of total sales, representing a 49.2% decline from the third quarter of 1997. Ditto unit drive shipments decreased by 59.9% compared to the third quarter of 1997, while Ditto unit disk shipments decreased by 36.6%. Iomega’s CEO and president, Jodie Glore, said that We’ve seen our Zip and Jaz drives rapidly replace personal tape storage. He said the sale was a strategic asset sale for Iomega, which will allow us to focus on our core Zip, Jaz and Clik! Branded portable storage products.
Tecmar was formed in 1997 as the new name for Markham, Ontario- based Legacy Storage Systems International Inc. Legacy transformed itself into a pure tape company by selling off Quasarmetrics Inc near-on-line storage systems subsidiary and related network storage server assets to Datavation Inc (CI No 3,077). It then acquired the tape drive business of the now vanished Rexon Inc and changed its name. Tecmar is expected to refocus the Ditto line into the networked storage market, and will invest towards the development of higher capacity and performance tape drives. Around 3 million units have been installed. Iomega will continue to sell Ditto drives for three months following the closure of the deal, and after that will sell off its remaining inventory to Tecmar.
Iomega keeps the rights to the Ditto brand name outside of tape and tape-related products, and retains its one-step icon. No Iomega facilities or employees are transferring to Tecmar.
