2007-05-07 22:09:28 -

OAKDALE, Minn., May 7 /PRNewswire-FirstCall/ -- Imation Corp. , a worldwide leader in removable data storage, today announced that it has entered into a definitive agreement to acquire certain assets of Memcorp Inc. and Memcorp Asia Limited (together known as "Memcorp") from privately held Hopper Radio of Florida, Inc.

The purchase price for the assets includes approximately $23 million in cash and $37.5 million in three-year notes, plus a potential earn-out of up to $20 million over three years, dependent on financial performance of the purchased business. Imation also expects

to invest approximately $15 million in additional working capital after the acquisition closes. The transaction is expected to close in the third quarter of 2007, subject to customary closing conditions and governmental approvals.

Memcorp, a U.S.-based consumer electronics marketing and distribution company, had Memorex-branded sales in 2006 of approximately $190 million out of total sales of approximately $285 million, including other branded sales that are not a part of the transaction. Memcorp sells a range of video, audio and home electronics products through retailers in North America. Memcorp has been operating under a long-term license agreement for the Memorex brand. Imation will acquire all Memcorp sourcing, marketing and distribution operations, as well as Memcorp's recent three-year agreement with MTV Networks, a division of Viacom International, to design and distribute specialty consumer electronics items under certain of the Nickelodeon brands.

"This acquisition builds on our recent successful acquisition and integration of the Memorex brand, and allows us to gain full control and leverage of the Memorex brand worldwide," said Frank Russomanno, chief executive officer and president of Imation Corp. "Memcorp's product portfolio, global sourcing expertise and creative marketing and licensing capabilities in branded consumer electronics, strengthen and extend the powerful Memorex brand across a variety of products beyond removable media."

The acquisition will expand Imation's Memorex-branded presence at retail, broadening Imation's product portfolio to include Memorex-branded TVs and digital displays, including flat-panel LCDs and digital picture frames, iPod(TM) accessories, radios and MP3 players. The portfolio will also include digital cameras, home theater video and portable DVD players, karaoke systems and office products such as voice recorders and paper shredders.

"Bringing our brand licensing expertise in consumer electronics to a recognized global leader carrying one of the broadest portfolios of data storage brands and products is an exciting opportunity," said Barry Smith, founder, president and chief executive officer of Memcorp. "I am confident the acquisition will further strengthen the Memorex brand and complement Imation's total product portfolio while potentially extending the company's popular consumer brands to additional geographies and product categories."

Approximately 60 Memcorp employees from the company's U.S. and Hong Kong operations are expected to transfer to Imation as part of the acquisition.

Imation expects the transaction to be financially accretive, adding an estimated $0.09 to 0.12 EPS, contributing an estimated $10 to $12 million in operating income and adding approximately $200 million in annual revenue in the first full year of operation. As previously discussed when Imation reported its Q1 results on April 19, the Company has not updated its prior 2007 business outlook, but intends to update and revise it on May 22.

Additional information about Imation is available at http://www.imation.com/. Additional information about Memcorp and its product portfolio is available at http://www.memcorpinc.com/.

About Imation

Imation Corp. is the only company in the world solely focused on the development, manufacture and supply of removable data storage products spanning the four pillars of magnetic, optical, flash and removable hard disk storage. With more than 50 years of data storage leadership beginning with the development of the world's first computer tape, Imation proudly marked its tenth anniversary as an independent company in 2006. In addition to the Imation brand, Imation Corp.'s global brand portfolio includes the Memorex brand, one of the most widely recognized names in the consumer electronics industry, famous for the slogan, "Is it live or is it Memorex?" Additional information about Imation is available at http://www.imation.com/ or by calling 1-888-466-3456.

Risk and Uncertainties

Certain information contained in this press release which does not relate to historical financial information may be deemed to constitute forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause our actual results in the future to differ materially from our historical results and those presently anticipated or projected. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as of the date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date. Risk factors include our ability to successfully close the acquisitions of the TDK recording media business and Memcorp and achieve the anticipated benefits including synergies in a timely manner; our ability to operate the Memorex product lines as an integrated entity; our ability to successfully defend our intellectual property, including the Memorex brand and patent licenses and the Philips patent cross license; continuing uncertainty in global economic conditions that make it particularly difficult to predict product demand; our ability to meet our cost reduction and revenue growth targets; our ability to successfully implement our global manufacturing strategy for magnetic data storage products and changes to our R&D organization and to realize the benefits expected from the related restructuring charges; our ability to introduce new offerings in a timely manner either independently or in association with OEMs or other third parties; our ability to achieve the expected benefits from the Moser Baer and other strategic relationships and distribution agreements such as the GDM joint venture and Tandberg relationships; the competitive pricing environment and its possible impact on inventory valuations; foreign currency fluctuations; the outcome of any pending or future litigation; our ability to secure adequate supply of certain high demand products; the ready availability and price of energy; availability of key raw materials or critical components; the market acceptance of newly introduced product and service offerings; the rate of decline for certain existing products, as well as various factors set forth from time to time in our filings with the Securities and Exchange Commission.

Imation, the Imation logo, Memorex, "Is it live or is it Memorex" are trademarks of Imation Corp. and its subsidiaries. All other trademarks are property of their respective owners.

Source: Imation Corp.