imation

Imation Acquires Nexsan In A $120 Million Deal

Imation Corp. (NYSE:IMN), a storage and data security giant, has acquired California-based-data-storage provider Nexsan, for about $120 million, with $105 million cash and the remainder in stock, making this the first acquisition of the enterprise storage for the new year.

imation

This acquisition deal by the data security giant has been struck in a move to rebuild its business around more high growth areas, after the company faced a declining pattern in the revenues generating from all of its lines of business. The company believes that this deal is going compensate for the series of losses and annual declines faced by the Oakdale, Minnesota- based company in the past 4 years.

“We are excited to have Nexsan become part of Imation,” said Philip Black, CEO of Nexsan. “Imation provides us the scale and global footprint to expand our business, while still keeping intact our award winning partner program, our strong management team and employees, and our innovative products and roadmap. We look forward to working as part of Imation to deliver compelling solutions that meet the growing storage, archive and compliance requirements of businesses worldwide. This is good news for Nexsan channel partners, employees and customers.”

Competing against big guns like EMC and HP, Nexsan generated revenues of $82 million with margins of over 40% on its products in 2011. The California based startup has around 200 employees, based in the U.S., U.K. and Canada, who will join Imation’s existing team subsequent to this acquisition.

“Nexsan’s management team has grown this business from startup to more than $80 million, with strong gross margins,” Imation Chief Executive Officer Mark Lucas said in the statement.

This deal is expected to accelerate Imation Corp. (NYSE:IMN)’s growth in the small and medium sized business and enterprise storage markets with more than 11000 existing customers worldwide.

“Imation’s acquisition of Nexsan is an exciting next step in our strategic transformation, which includes investing in growth platforms in data storage and security solutions, where we are targeting markets with strong growth rates,” said Mark Lucas, president and CEO of Imation.

In its third quarter of last year, the company reported that its revenues stood at a total of $248.2 million, after declining 19.6% from its Q3 earnings in 2011.

Subsequent to this acquisition, Nexsan will continue to operate from its headquarters in Thousand Oaks, California, under its existing management.

Shares of Imation Corp. (NYSE:IMN) closed at $4.67 on the New York Stock Exchange on Monday.

LEAVE A COMMENT


X
Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Are you an intelligent investor?

ValueWalkPremium is a website and newsletter for smart investors like yourself. We focus on the latest hedge fund industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today for only a few dollars a day and get a 3 day no obligation trial with a targeted 20% discount coupon code.

Cancel anytime during trial and you are never charged.

Limited time offer: For first 50 subscribers

0