Imation Spends $20M For Equity In Exabyte And Resale Agreement

Jim Ellis, director of business strategy at Imation, said his company is getting slightly less than 5 percent of Exabyte, but would not specify how much of the $20 million is for that stake. However, he said, the majority of the investment is for tape distribution rights.

For Imation, the company plans to use its worldwide distribution expertise for tape media, said Ellis. The company has a similar exclusive arrangement with IBM for its Magstar and LTO tape media, as well as its optical and other media, he said. This is in addition to Imation's own BlackWatch brand of tapes compatible with DLT, SDLT, 9840, 3590 and LTO technology, he said.

The distribution agreement with Imation is a permanent one, said Kelly Beavers, vice president of investor strategy at Exabyte.

For Exabyte, the $20 million makes the company look much stronger financially and gives it the resources it needs to move forward with new technology, Beavers said. "The cash infusion comes in time," he said. "We need it to convince customers to work with Exabyte going forward. It changes the balance sheet dramatically."

Before the investment, Exabyte typically had a few hundred thousand dollars in cash on-hand, said Beavers.