Imation Closes Acquisition of TDK Brand Recording Media Business for Approximately $260 Million in Stock and Cash

Imation Closes Acquisition of TDK Brand Recording Media Business for Approximately $260 Million in Stock and Cash

New Delhi – August 29, 2007– Imation Corp (NYSE: IMN) today announced that it has completed the previously announced acquisition of the TDK brand recording media business and use of the TDK brand name for recording media products worldwide, for a combination of Imation common stock and cash.

Imation issued to TDK Corporation 6.8 million shares of Imation common stock, representing 16.6 percent of shares outstanding after issuance of the shares to TDK. Additional cash consideration and customary closing costs and advisory fees brought the total cost to Imation to approximately $260 million. Additional cash consideration of up to $70 million could be paid by Imation to TDK Corporation contingent upon future financial performance of the acquired business.

By agreement, TDK’s ownership stake will not exceed 22 percent of Imation common stock on a fully diluted basis. TDK becomes the largest shareholder of Imation and, under terms of the transaction, has the right to nominate a representative to serve on the Imation Board of Directors.

Frank Russomanno, Imation President and CEO said: “The acquisition of the highly respected TDK brand for recording media accelerates our transformation to a brand and product management company as we grow our portfolio across the four pillars of storage and extend brands selectively into new categories. We are excited about adding the TDK brand recording media products to our commercial and consumer product portfolio. This financially accretive transaction builds shareholder value for Imation and the two companies have set the foundation for a long-term strategic relationship .”

Highlights of the completed transaction include the following:

· Imation purchased a combination of assets and stock of TDK’s recording media business and use of the TDK brand name for current and future recording media products including magnetic tape, optical media, flash media and accessories.

· The TDK brand recording media business operates globally, with major operations in Japan, Europe, the United States, and throughout the Asia Pacific region. A total of approximately 350 TDK employees in the recording media business have transferred to Imation and an additional number of employees will provide transitional services for a period of time. An integration team is assessing the future requirements for the combined business.

·The transaction includes a Supply Agreement providing uninterrupted and continuing supply of TDK brand products to the market. TDK will retain R&D and manufacturing operations for recording media products including audio, video and data storage tape, and Blu-ray optical discs. TDK will supply TDK brand products to Imation as well as non-TDK brand products to its other OEM customers.

· Under terms of the agreement, Imation has a long-term right to use of the TDK brand for current and future recordable magnetic, optical, flash media and accessory products globally. That right is revocable by TDK after 25 years, with a one year wind down. The transaction includes a Supply Agreement for TDK branded magnetic tape products, to include data storage, audio and video tape cartridges.

TDK Financial and Operational Information

For the 12 month period ended December 2006, Imation estimates that TDK generated approximately $670 million in revenue associated with the business being sold to Imation. Looking forward, Imation expects to report $575 million to $600 million in revenue, post integration associated with the business being acquired due to the elimination of certain revenues associated with the TDK brand which are already captured by Imation.

Imation anticipates that the acquisition, once fully integrated, will add approximately $25 million to $30 million in annualized operating income. This estimate includes purchase price amortization expenses, as well as significant synergy benefits, including expense reductions, purchasing, and supply chain benefits. Relative to fully diluted E.P.S. once fully integrated and on the same basis described above, Imation estimates the acquisition to be slightly accretive including per share dilution from the issuance of shares to TDK prior to any share repurchase activity and the assumed loss of interest income due to cash used in the acquisition. The company had previously stated its intention to offset the dilution over time under its ongoing share repurchase authorization, including its pre-existing 10b5-1 program and other share repurchase activity.

About Imation Corp

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, in 2006 Imation proudly marks its tenth anniversary as an independent company. 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?(TM)”. Additional information about Imation is available at http://www.imation-southasia.com.

Risk and Uncertainties

Certain information contained in this press release which does not relate to historical financial information, including the expected impact of the acquisition of the TDK recording media business, 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 integrate and achieve the anticipated benefits of the acquisition of the TDK recording media business as well as the Memcorp acquisition, including synergies, in a timely manner; 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 actions; 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 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 including 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.

For further information, please contact:
Rajiv Kumar
Imation India Pvt Ltd.,
Phone: 91 11 41519880
Email: rajivkr {at} imation(.)com