Imation Corp. announced that it has appointed Bob Fernander as interim CEO and is acquiring Connected Data Inc. for roughly $7.5 million.
For more information visit: www.imation.com
Unedited press release follows:
Imation Announces Executive Appointments and Strategic Acquisition of Connected Data
Bob Fernander appointed Interim CEO
Acquires Connected Data, An Emerging Private Cloud Sync and Share Company
Geoff Barrall appointed Chief Technology Officer
Corporate restructuring expected to be completed in early 2016
OAKDALE, Minn — Imation Corp. (NYSE:IMN) (“Imation” or the “Company”) today announced that Bob Fernander, an existing member of the Company’s Board of Directors (the “Board”), has been appointed as Interim CEO, effective immediately. Additionally, the Company announced it has acquired substantially all of the equity of Connected Data, Inc. (“Connected Data”), an emerging enterprise-class, private cloud sync and share company, in a transaction valued at approximately $7.5 million at closing. The Company intends to complete the acquisition of Connected Data through a short-form merger as soon as practicable. Connected Data’s founder, CEO and current member of Imation’s Board, Geoff Barrall, will join the Company’s executive leadership team as Chief Technology Officer. Separately, Interim President Barry Kasoff has assumed the role of Chief Restructuring Officer and will continue to work with Mr. Fernander to execute Imation’s restructuring plan.
“As an experienced professional with an established track record of building technology-based businesses, Bob is the right interim leader for Imation. He is deeply involved in the execution of the Company-wide restructuring plan and has the skill set necessary to maximize the value of our storage businesses, which includes Nexsan, IronKey and now Connected Data,” said Joseph A. De Perio, non-executive Chairman of the Board. “Connected Data puts the Company’s product roadmap on trend and boosts the enterprise value potential of all of Imation’s storage businesses. Geoff is an exceptional business builder, technologist and inventor, and Imation is fortunate to bring him on as an executive overseeing all of our storage strategies and development.”
Founded in 2012, Connected Data produces Transporter, an enterprise-class, private cloud sync and share line of appliances that offer a secure, on premise and cost efficient alternative to Dropbox. Connected Data’s patented technology creates a mobile data infrastructure that delivers public cloud features without the expense or security compromises of cloud services. Transporter solutions allow corporations to use existing storage infrastructure to achieve high performance cloud functionality. Transporter can be scaled and integrated with existing Imation product lines, and the acquisition augments Imation’s vision in delivering a comprehensive and secure storage, backup and collaboration ecosystem.
“Connected Data is a pioneering company and a significant acquisition for Imation that will place us at the forefront of the one of the fastest growing and most important sectors of technology. The Connected Data product line will be able to leverage the existing Nexsan sales infrastructure and channel relationships to boost sales and create a more comprehensive product offering,” said Mr. Fernander. “We are witnessing an increasing global demand for cost efficient, secure file synchronization to mobile devices, and Connected Data’s alignment with Imation’s SDMA (Secure Data Movement Architecture) will allow us to deliver industry leading private cloud solutions.”
Under the terms of the transaction, subject to certain adjustments, approximately $4.4 million of consideration will be paid in Imation common stock at an issue price of $2.75 per share, approximately $0.5 million will be paid in cash, and approximately $2.6 million in debt will be paid off by the Company. Up to $5 million in cash and shares in earn outs are possible based upon Connected Data’s performance through 2016 and the first half of 2017. Connected Data is projected to have over $7 million in standalone revenue in 2016, and the transaction will be immediately accretive to Imation.
Geoff Barrall, Chief Technology Officer, commented, “We are proud of what we have built at Connected Data. Our innovative product line represents a major disruption in the field of file sync and share as customers look for cost effectiveness and maximum security. Coming under the Imation umbrella is a logical extension of our evolution and will drive significant synergies and efficiencies across the organization.”
The transaction was approved by the Company’s Audit Committee pursuant to the Board’s Related Party Transaction Policy and by the disinterested directors, after receiving a fairness opinion that the transaction was fair, from a financial point of view, to the Company.
Imation’s Board and executive team will also continue to work closely with its advisors to drive change within the Company and explore strategic alternatives to maximize shareholder value, including, but not limited to, divestitures of its non-core and non-operating assets. To that end, the Strategic Alternatives Committee was formed in August 2015 to work with management and make recommendations to the Board. The Strategic Alternatives Committee has also been tasked with (i) examining opportunities to invest the Company’s excess cash and (ii) formulating strategies to maximize the value of the Company’s investments and assets, such as its owned common stock in Sphere3D Corporation. As of September 30, 2015, Imation’s total cash balance is expected to be at least $85 million, and the corporate-wide restructuring plan is expected to be mainly completed by January 1, 2016.
The Company has enclosed a brief slide presentation related to its current initiatives in the Form 8-K filed today with the SEC.
Webcast and Replay Information
A teleconference to discuss this release is scheduled for today October 14, 2015 at 4:00 PM Central Time and will be available on the Internet on a listen-only basis at www.ir.Imation.com or www.streetevents.com.
A taped replay of the teleconference will be available beginning at 8:00 PM Central Time on October 14, 2015, until 7:30 PM Central Time on October 20, 2015, by dialing 855-859-2056 or 404-537-3406 (conference ID 59169709). All remarks made during the teleconference will be current at the time of the teleconference, and the replay will not be updated to reflect any subsequent developments.
About Imation
Imation (NYSE: IMN) is a global data storage and information security company. Our products and solutions help organizations and individuals store, manage and protect digital content. Imation’s storage and security portfolio includes Nexsan high-density, archive and solid-state optimized unified hybrid storage solutions; IronKey™ mobile security solutions that address the needs of professionals for secure data transport and mobile workspaces; and consumer storage solutions, audio products and accessories sold under the Imation, Memorex and TDK Life on Record brands. Imation reaches customers in more than 100 countries through a powerful global distribution network. For more information, visit www.imation.com.