Imation has entered into a definitive agreement to acquire Memorex for more than US$330.
The boom in CD and DVD media consumption has made companies big business with Memorex’s latest full year results showing US$30 million income off revenues of US$430 million.
Memorex launched the audiocassette in 1971 the company’s consumer business was acquired by Tandy in 1982 and then again by Hanny Holdings in 1993. In 1996 the Company launched recordable CDs into the mass consumer market. The company’s current portfolio includes recordable CDs and DVDs, which constitute more than two thirds of the Company’s 2005 revenue; branded accessories at about 15 percent; USB flash drives at about 10 percent; with magnetic and optical drives at about five percent.
The Company has been the North American market share leader in retail sales for the past six years in the CD category and four years in the DVD category.
After completion of integration, Imation expects Memorex to add approximately US$32 – US$36 million in operating income to its bottom line.
Imation is the world’s leading provider of removable data storage media particularly tape cartridges, but also recordable optical discs, USB flash and removable hard drives.
“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,” he said.
Michael Golacinski, President and CEO of Memorex will head up Imation’s consumer business, maintaining the Memorex headquarters in