January 3, 2013 – Imation will pay $105 million in cash and more in stock for solid state and hybrid storage array vendor Nexsan in a deal that represents a shift toward offering more purpose-built data storage and security for SMBs.
Nexsan offers a portfolio of disk-based and hybrid disk and solid-state storage systems geared at traditional on-premise, virtualized and cloud deployments. Nexsan also carries approximately 11,000 customers in areas such as banking, health and life sciences, and university research, with a reported $82 million in revenue in 2011.
Imation, based in Oakdale, Minn., has traditionally sold data storage and security solutions to handle audio and video transactions, though it has reorganized in recent months to cover a more horizontal spread of industries. During a quarterly finance review in October, Imation revealed a nearly 20 percent drop in revenue compared with that quarter in 2011. To meet faster-than-anticipated declines in certain industry sectors, particularly in its media revenues, Imation at that time branched its business units into two focus areas: Tiered Storage and Security Solutions, and Consumer Storage and Accessories.
Nexsan talent, offerings and expansion will fall under the Tiered Storage and Security Solutions division, with a strategy to be determined in the first quarter of 2013, according to Imation.
Nexsan CEO Philip Black and his management team, as well as 200 other employees at global offices, are expected to sign on as Imation employees, with operations slated to continue from Nexsan’s headquarters in Thousand Oaks, Calif. With $15 million in stock included with cash, the deal for privately held Nexsan is final and will be reflected on Imation’s fourth-quarter earnings, according to a release on the deal.
Overall, the disk storage market was slated for a return to high-single-digit percentage revenue growth through 2012 by a number of analyst firms as the demand on and volumes of data continues to balloon.