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Imation Buys TDK's Recordable Media Business

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Imation Buys TDK's Recordable Media Business

Postby Ian on Thu Apr 19, 2007 10:26 am

Who's Imation going to buy next? Verbatim? They own most of the other big media providers.

http://ir.imation.com/phoenix.zhtml?c=7 ... highlight=

Imation and TDK Agree to Imation's Acquisition of TDK Brand Recording Media Business for $300 Million in Stock and Cash

TDK to Take Approximately 17% Ownership Stake in Imation Seat on Imation Board of Directors Transaction Expected to Close in Calendar 3rd Quarter 2007

TOKYO and OAKDALE, Minn., April 19, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Imation Corp. (NYSE: IMN) and TDK (NYSE: TDK) announced today that they have reached a definitive agreement under which Imation will acquire TDK brand world wide recording media business and use of the TDK brand name for recording media products, for $300 million in a combination of Imation common stock and cash with potential for payment of up to an additional $70 million based on future financial performance of the acquired business. TDK will retain its R&D, manufacturing and OEM business. The boards of directors of both companies have approved the transaction.

Highlights of the proposed transaction include the following:

* Imation will acquire TDK brand recording media business and use of TDK brand name for current and future recording media products including magnetic tape, optical media, flash media and accessories.

* At closing, TDK will receive approximately $280 million in Imation common stock, representing approximately 17 percent of shares outstanding, and $20 million in cash subject to certain conditions. This transaction will make TDK the largest shareholder of Imation and TDK will have the right to nominate a representative to serve on the Imation Board of Directors. By agreement, TDK's ownership stake will not exceed 22 percent of Imation common stock on a fully diluted basis.

* TDK brand recording media business operates globally, with major operations in Europe, Japan, the United States, and Asia. A number of TDK brand recording media employees are expected to transfer to Imation upon close. The transaction is expected to close in the third calendar quarter of 2007, subject to customary closing conditions.

* TDK will continue R&D and manufacturing operations for recording media products including audio, video and data storage tape, and Blu-ray optical discs. TDK will supply Imation as well as its other OEM customers.

* The transaction includes a Supply Agreement providing uninterrupted and continuing supply of TDK brand products to the market.

Frank Russomanno, Imation President and CEO said: "With this transaction Imation expands our portfolio of brands and builds on our four pillars of storage. Imation is bringing the well known TDK brand into our growing portfolio of strong consumer brands as well as adding the highly respected TDK brand recording media products to our commercial and consumer product portfolio."

"We continue to build on our solid legacy, our global footprint, broad product portfolio, deep technology capability and global distribution, where we have operational and strategic synergies. Imation and TDK have established the foundation for a long-term strategic relationship that potentially allows the two companies to collaborate in other areas of mutual interest and benefit," Russomanno concluded.

Takehiro Kamigama, TDK President said: "Powerful brands are important as consumers trust their critical information to these products. TDK and Imation can develop an ideal cooperation by complementing each others strengths in terms of regions, product and technology. The combination of the powerful TDK brand and the global brand and product management capabilities of Imation is the right strategy to take full advantage of these trends, compete effectively, meet evolving market demand and profitably grow the business."

"In this era of 'digital convergence'-- where communication technologies become more powerful and the Internet is ubiquitous -- recordable media products which meet the demand for capacity, convenience and mobility must anticipate the emerging needs of consumers to enable them to 'live the digital lifestyle.' This transaction positions the TDK brand to continue to meet consumers' needs into the future," Kamigama concluded.
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Postby Justin42 on Thu Apr 19, 2007 7:13 pm

Sigh.

There goes what little quality media TDK used to manage to sneak out.
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Postby [buck] on Thu Apr 19, 2007 8:37 pm

Well, for what it's worth, it doesn't look like the markets have reacted very well to this deal. Shares in TDK of down about 2% since this was announced, but more surprisingly, Imation is down about 13% :o
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Re: Imation Buys TDK's Recordable Media Business

Postby Wesociety on Fri Apr 20, 2007 12:12 pm

Ian wrote:Who's Imation going to buy next? Verbatim?

I HIGHLY doubt that is going to happen. The Verbatim recordable media brand fits in well with the rest of Mitsubishi's optical storage products and businesses.

Here is the really interesting part of this deal:
TDK will retain its R&D, manufacturing and OEM business.

* TDK will continue R&D and manufacturing operations for recording media products including audio, video and data storage tape, and Blu-ray optical discs. TDK will supply Imation as well as its other OEM customers.


So basically, Imation only bought the rights to use the TDK brand name and that's it. It sounds like Imation is still going to have to pay TDK R&D for royalties and development of new products! It also sounds like TDK will be able to sell recordable media to other companies for rebranding (OEM business). So we will probably still see some "real" TDK media on the market under other brand names, even if Imation decides to use other media under the TDK brand.
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Postby evilboy on Sat Apr 21, 2007 8:05 pm

Well, TDK has used all kinds of weird stuff in the last years including CMC MAG M01 and RICOHJPN D01 - so no real loss :evil:

Imation doesn't own much more than Memorex, and TDK's brand name, IIRC.
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Postby Wesociety on Sat Apr 21, 2007 9:04 pm

evilboy wrote:Well, TDK has used all kinds of weird stuff in the last years including CMC MAG M01 and RICOHJPN D01 - so no real loss :evil:

Imation doesn't own much more than Memorex, and TDK's brand name, IIRC.

Actually, Imation does do a bit of their own R&D. Check out this video of the Imation facility in Minnesota, which shows how Imation is developing Blu-ray and HD DVD technologies:
http://blue.imation.com/intotheblue/
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Postby Justin42 on Sat Apr 21, 2007 9:30 pm

Nice of them to develop all this great stuff then buy the scrap D-grade media from the worst of the Taiwan manufacturers to sell on the US market...

The video is so cheesy. Reminds me of the RCA CED video disc manufacturing video (Which I can't find the link to now)...
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Postby Wesociety on Sun Apr 22, 2007 12:11 am

Justin42 wrote:Nice of them to develop all this great stuff then buy the scrap D-grade media from the worst of the Taiwan manufacturers to sell on the US market...

I hear ya. I wish they made their own media in large quantities. From what I understand, none of the recordable media manufactured at their Minnesota facility will ever reach consumers...
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