EMC Brings $4 Billion Home In International Reorganization

EMC wrote in an SEC filing on Tuesday that its Board of Directors on November 18 approved a plan to reorganize its international operations by transferring certain assets of its RSA and Data Domain and other foreign corporations owned directly by EMC into a single holding company.

With the reorganization, EMC's international holding company will send about $4 billion in stock and cash back to its U.S. headquarters.

The restructuring, which will result in a previously unexpected charge of approximately $100 million in the fourth quarter of 2009, is expected to be completed in 2010, according to the filing.

Michael Gallant, an EMC spokesperson, said that over the past 30 years EMC has ended up with multiple legal entities worldwide thanks to its setting up of overseas branch offices, acquisitions of overseas companies, and acquisitions of U.S.-based companies with overseas offices.

As a result, Gallant said, EMC needs to streamline operations to help increase efficiency. For instance, because of recent acquisitions, EMC in France has an EMC office, an RSA office, and a Data Domain office. Should a customer want to purchase a solution consisting of products from the three lines, it now needs to place three purchase orders, while after the reorganization only one purchase order will be needed.

"This is about bringing a 'one EMC' experience to our customers," Gallant said.

The $4 billion will be added to EMC's cash holdings in the U.S., where they will be available for use in the same manner as other EMC assets, Gallant said. It could be used for strategic investments, acquisitions, or a stock buyback, he said.

While Gallant would not speculate on whether EMC had specific acquisition plans, the company is among the most acquisitive in the IT industry.

Just this year alone, EMC has acquired e-discovery software vendor Kazeon, server configuration and compliance management software developer Configuresoft, open source Linux and Java developer SourceLabs, and its biggest prize in 2009, data deduplication appliance vendor Data Domain.

Prior major acquisitions include SMB storage vendor Iomega, security vendor RSA, storage software vendor Legato, and content management software vendor Documentum.