Imation buys TDK's recording media biz
And they can prove it: they've got the whole thing on tape
TDK is to sell its recording media business to Imation for $300m in stock and cash.
The deal is expected to close in calendar third quarter 2007. TDK will receive about $280m in Imation stock and $20m in cash. An additional $70m may flow into TDK coffers based on future financial performance.
Under the agreement, Imation will use the TDK brand for present and future recordable magnetic, optical and flash media products world-wide. The right is revokable by TDK after 25 years.
With Imation's stock, TDK will take a 17 per cent ownership stake in the company. The transaction will make TDK the largest shareholder of Imation, giving them the right to nominate a representative to serve on Imation's board of directors.
Imation expects the acquisition will add $25m to $30m in annual income.
TDK will retain its research and development, manufacturing and OEM business.
In a joint announcement, Imation posted its first quarter earnings today. The company's revenue grew 25.9 per cent to $421.9m (Q1' 06: $335.2m). Operating income was down $4.5m from last year however, at $23.6m (Q1 '06: $29.3m).
Imation attributes the drop to industry-wide price erosion due to excess capacity of NAND flash and a delay in the tape media market of the introduction of LTO 4 drives. Imation expects to begin shipping LTO 4 drives in the second quarter. ®