Reprinted from an Imation press release
Imation agreed to buy Memorex for 330 million cash, marking a return to its AV roots dating to its spinoff from 3M 10 years ago. The Oakdale, Minn., optical storage supplier also will pay up to 45 million over a 3-year period in buying a combined 67 percent stake in the company from Hanny Holdings and Investor Asia. Under the proposed acquisition, Memorex will emerge as a Imation subsidiary based in Cerritos, Cal., under the direction of Pres. Mike Golacinski, a onetime Maxell executive. In addition to Hanny and Investor Asia, Memorex media suppliers Ritek and CMC Magnetics also own a stake in the company. After the sale closes in mid-2nd quarter, Memorex will emerge as Imation’s brand at retail, while its own banner focuses on business-tobusiness, Imation CEO Bruce Henderson told analysts in an earnings conference call Fri. Imation will acquire $90-$100 million in net tangible assets and $230-$240 million in intangible assets,Imation officials said. After the purchase closes, Imation will have $175 million cash and no debt, CFO Paul Zeller said. It will seek to increase its revolving credit facility to $200-$250 million from $100 million, he said. The acquisition will be "highly accretive" to Imation’s earnings starting in 2007, following a year of integration,Henderson said. Imation expects to incur $13-$17 million in restructuring charges as a result of the Memorex acquisition, company officials said.