It will also kill off its long-term license agreement with TDK Corporation and use cash from the wind down to reinvest in its Tiered Storage and Security.
Barry Kasoff, interim President and Member of the Board of Directors said that the steps were important milestones in our efforts to re-establish Imation as a more competitive company.
“These wind downs are critical in our ongoing effort to create a leaner, more focused Imation. Our TSS segment is the foundation for the Company’s profitable growth over the long term. The Board, together with management, remains intensely focused on building that business and driving efficiencies throughout the organisation to enhance performance.”
The thinking is that getting out of certain legacy businesses will improve the company’s short term financial performance and position the Company for profitable growth.
Imation reached a definitive agreement with TDK under which TDK will relinquish substantially all of its investor rights. Imation’s will give up its license rights to the TDK Life on Record trademark and TDK will transfer to Imation approximately 6.7 million shares of Imation common stock.
The transaction is expected to close in the fourth quarter of 2015. To facilitate these transitions, the Company plans to execute Transition Service Agreements with customers to provide for an orderly transition and inventory replenishment through the end of 2015.
The Company expects that once the wind downs are complete, the streamlined business will operate at break-even on a run-rate basis in 2016.
There was no mention in the announcement about staffing loses.