Imation to Collaborate with TDK Corp. on Magnetic Tape Technologies

Imation Corp., which develops technologies to store, protect and connect the digital world, has signed a strategic agreement with TDK Corporation to jointly develop and manufacture magnetic tape technologies. Under the agreement, the companies will collaborate on the research and development of future tape formats in the two companies’ research centers in the United States and Japan, while consolidating tape coating operations to the TDK Group Yamanashi manufacturing facility.

“This strategic tape alliance between Imation and TDK brings together two of the world’s leading data storage technology companies to jointly develop and manufacture the next generations of advanced tape,” said Mark Lucas, president and chief executive officer of Imation. “By leveraging both companies’ deep tape knowledge and decades of invention and innovation, we expect to accelerate the development and commercialization of future tape formats. TDK’s high-performance dual-layer coating technology, combined with Imation’s proprietary advanced servo-writing, bring the industry’s best technologies together to enable future multi-terabyte formats.”

Commenting on the critical role of magnetic tape in global IT infrastructures, Lucas continued, “Because of its superior archival capabilities, low cost per gigabyte, and robust future roadmaps that include rapidly increasing capacities matched with high performance, advanced magnetic tape remains the storage media of choice for archival applications. In fact, most of the world’s critical data, whether government, enterprise or cloud applications, is stored on magnetic tape.”

“Our partnership with Imation is a logical progression of our two companies’ strong strategic relationship,” said Takehiro Kamigama, president and CEO of TDK Corporation. “Imation acquired the TDK brand recording media sales business in 2007 and has successfully expanded the portfolio with high-quality, innovative data storage and audio product offerings marketed under the TDK Life on Record brand. Now, TDK is very pleased to partner with Imation to leverage the strength of each company’s deep technology and manufacturing expertise in magnetic tape, working closely together to develop and commercialize next-generation tape formats.”

Imation also announced that it will discontinue its magnetic tape coating operations at the company’s Weatherford, Okla., facility by April 2011 and will subsequently close this facility. Approximately 115 positions will be eliminated, the majority of which are in manufacturing operations. Imation will maintain its research, development and engineering facility at the company’s headquarters in Oakdale, Minn.

“The decision to exit coating operations at our Weatherford facility is a difficult but necessary step as we continue to improve our operating efficiency and optimize our magnetic tape business as part of our overall strategy,” Lucas said. “We are committed to working with our impacted employees, providing financial assistance and outplacement support during the upcoming transition.”

In conjunction with the shutdown of the facility and the rationalization of certain product lines, Imation anticipates recording approximately $50 million of charges for asset impairments, restructuring and other charges, $45 million of which is non-cash. The majority of these charges will be recognized in the fourth quarter 2010 results.
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