Optical disc giant to buy optical disc giant

By Matt Whipp

Posted on 20 Jan 2006 at 17:21

Optical disc giant Imation is to buy rival Memorex in a deal worth up to $375m.

Imation will pay $330m in cash, with further potential payments of up to $45m depending on performance in the three years following the acquisition.

Following the deal, Imation expects Memorex to add up to $36m in operating income to the balance sheet.

'This acquisition is a major strategic milestone for Imation, as we implement our profitable growth strategy. It is also a win-win for both companies' customers and shareholders,' said Bruce Henderson, Imation Chairman and CEO. 'We are gaining a powerful consumer brand and global market share leader in recordable CDs and DVDs as well as an experienced management team under the leadership of Mike Golacinski. Added to our technology expertise, strong B2B brand, global footprint, broad product portfolio and industry experience, we are creating a new global powerhouse in the data storage industry.'

Michael Golacinski, President and CEO of Memorex International, will lead Imation's consumer business, and the Memorex headquarters will remain in Cerritos, California.

The market responded positively to the news, with shares peaking at $50.93 in early trading from yesterday's close of $45.60.

For more information, visit the Imation website.