Imation Corp, a worldwide leader in data storage media, today announced an agreement to sell its Specialty Papers business to Nekoosa Coated Products, LLC, for $17 million, with the potential for up to an additional $4 million consideration over the next three years, contingent on performance of the business. The business provides carbonless cut-sheet and digital carbonless paper for businesses and institutions such as printers, banks, and hospitals.

Approximately 90 employees are expected to transfer as a part of the sale, which includes Imation's Nekoosa, Wisconsin manufacturing facility. Under terms of the agreement, Nekoosa Coated Products, LLC, headed by Brian Dunsirn, president and chief executive officer, will purchase virtually all the assets of Imation's Specialty Papers business. The transaction is expected to close by the end of second quarter, 2005, subject to normal closing conditions.

Both companies emphasized that a carefully managed transition plan is being executed to ensure a smooth transfer of operations and uninterrupted supply to customers. Nekoosa Coated Products, LLC, will be based in Nekoosa, Wisconsin. Dunsirn Partners also operates several other Wisconsin-based companies including Dura-Fibre, LLC, which manufactures laminated paperboard products and Operon Systems, LLC, which provides productivity-enhancing software to paper converters and other industries.

Imation's Specialty Papers revenues were $45.6 million in 2004 and $10.2 million for the first quarter of 2005, respectively. The Company anticipates the sale will net approximately $14 million in cash, and an after- tax gain in the range of $4 million to $5 million to be recorded in discontinued operations, exclusive of any contingent additional future consideration.