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By | Chris Mellor 11th January 2016 11:03

Imation sells off the family jewels

Memorex brand goes for $9.4m, corporate HQ for $11.5m

+Comment Imation, now run by activist investor Clinton Group people, is selling the Memorex trademark – and two trademark licences associated with it – for $9.4m, while also disposing of its corporate headquarter facility in Oakdale, Minnesota, for $11.5m.

"Both sales are consistent with the (our) stated restructuring, wind down process, and liquidation of its legacy business assets," said the company. So, that said, its future is now basically the Nexsan shared storage array products, plus some security stuff, integrated with the acquired Connected Data file sharing business.

"The acquisition of Connected Data augments Imation’s vision in delivering a comprehensive and secure storage, backup and collaboration ecosystem and creating a valuable standalone disk storage subsidiary," said the company.

Interim CEO Bob Fernander said the restructuring should be completed this quarter.

However, there is a new twist to this story. In late December 2015, the company changed its cash investment policy, setting up a Strategic Alternatives Committee (SAC) on its board to recommend uses for excess capital, so as to invest in public company stock, index funds, mutual funds, and other investment funds if the returns and risks were both acceptable.

Financial advisors and money management firms can contact Fernander if they have proposals that can help Imation in this regard.

The SAC "has been tasked with examining opportunities to deploy Imation’s excess cash and developing initiatives for strategic value creation". Now get this:

The scope of the acquisition opportunities to be considered may be outside of industries that have comprised Imation’s historical focus, and may be sourced in the private and public markets.

The company generally expects to evaluate opportunities where it can acquire businesses that it can actively manage and oversee, but may make investments in opportunities that it will not control.

+Comment

El Reg speculates this could be a recommendation that financial advisors and money management firms apply to Fernander's Imation for help bankrolling their bids. The Clinton Group would be able to use Imation as a source of cheap money for future investments.

Joseph De Perio, non-exec Imation board chair and a senior portfolio manager of the Clinton Group, said: “We look forward to continuing the transformation of the corporation into an entity poised for sustained growth and equity value creation". An "entity", please note, not a data storage business.

The old Imation is now an emptying shell wrapped around the acquired Nexsan and Connected Data businesses. It could well be that the Clinton Group is going to use this new incarnation of Imation to finance acquisitions and other investments. ®

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