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PART I
Item 1. Business.
General
Imation Corp., a Delaware corporation, is a global data storage and data security company. Our products and solutions
help organizations and individuals store, manage and protect their digital content. Imation’s storage and security portfolio
includes Nexsan™ high-density, archive and solid-state optimized unified hybrid storage solutions; IronKey™ mobile security
solutions that address the needs of professionals for secure data transport and mobile workspaces; and consumer storage
solutions, audio products and accessories sold under the Imation™, Memorex™ and TDK Life on Record™ brands. Imation
reaches customers in more than 100 countries through our global distribution network. As used herein, the terms “Imation,”
“the Company,” ‘‘we,” “us,” or “our” mean Imation Corp. and its subsidiaries and consolidated entities unless the context
indicates otherwise.
Imation Corp. was formed in 1996 as a result of the spin-off of substantially all of the businesses which comprised the
data storage and imaging systems groups of 3M Company. Subsequent to the spin-off we divested all of our non-data storage
businesses and focused on data storage media, primarily as a manufacturer of magnetic tape products under the Imation
brand, sold to commercial end users through multiple distribution channels. We then expanded our business into other
removable data storage media such as optical media, flash and solid state drives, removable and external hard disk drives
and consumer electronics, including audio and video products with business acquisitions in 2006 and 2007 that included our
Memorex and TDK Life on Record brands. Also in 2007 and in 2008, we acquired certain assets resulting in our Memorex
consumer electronics business and XtremeMac™ business. Both of these businesses have recently been divested as a part
of our strategic transformation discussed below.
In February 2011 we announced our transformation strategy, which included improving gross margins, exiting low
margin products and introducing new products in secure and scalable storage markets and creating a global leadership
position in high-security data storage and device management. In 2011, we purchased the secure data storage hardware
business of IronKey Systems, Inc. (IronKey) and the portable security solutions and technologies of MXI Security (MXI) from
Memory Experts International, Inc.
On December 31, 2012, we acquired Nexsan Corporation (Nexsan), a provider of disk-based storage systems. The
acquisition included the Nexsan technology platform and portfolio of disk-based and hybrid disk-and-solid-state storage
systems. This acquisition was a step toward our strategy of investing in growth platforms in data storage and data security
solutions and was intended to significantly accelerate our long-term growth in the small and medium-sized business and
distributed enterprise storage markets.
Today, our global brand portfolio includes the Imation brand, the Memorex brand, the IronKey brand and the Nexsan
brand. Imation is also the exclusive licensee of the TDK Life on Record brand, one of the world’s leading recording media
brands.
During the fourth quarter of 2012, we announced the acceleration of our strategic transformation, including the
realignment of our global business into two new business units, a cost reduction program and our increased focus on data
storage and data security including exploring strategic options for our consumer electronics brands and businesses. As our
traditional media businesses were declining, we determined that we needed to accelerate our business transformation. During
the first quarter of 2013 we announced our plans to divest our XtremeMac and Memorex consumer electronics businesses.
The divestiture of our Memorex consumer electronics business occurred on October 15, 2013 and the divestiture of our
XtremeMac business occurred on January 31, 2014. See Note 4 — Acquisitions and Divestitures in our Notes to Consolidated
Financial Statements for further information on these divestitures. The consumer storage business under the Memorex and
TDK Life on Record brands and the consumer electronics business under the TDK Life on Record brand are being retained.
The realignment of our global business into two new business units better aligns the Company with our key consumer
and commercial channels. The two business units consist of Consumer Storage and Accessories (CSA), which focuses
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