Imation Launches Investment Adviser Subsidiary GlassBridge Asset Management, LLC
- Investment Management
- 03.02.2017 12:00 pm
Imation Corp. (NYSE: IMN) ("Imation") today announced the launch of its investment adviser subsidiary, GlassBridge Asset Management, LLC ("GlassBridge"). In conjunction with the launch of GlassBridge, Imation has successfully concluded the transition of its principal business activities to become a publicly-traded alternative asset manager. Imation intends to rebrand as "GlassBridge Enterprises" in the summer of 2017. The corporate headquarters will remain in Oakdale, Minnesota.
The launch of GlassBridge is the result of the closing of a transformative, strategic transaction (the "Transaction") with Clinton Group, Inc. ("Clinton"), a diversified asset management firm and an investment adviser registered with the U.S. Securities and Exchange Commission, on February 2, 2017. The Transaction allows for GlassBridge to place under Clinton's management – within Clinton's quantitative equity strategy – up to $1 billion of investment capacity for an initial term of five years.
At a special meeting of the stockholders on January 31, 2017, Imation's stockholders approved the issuance of 12,500,000 shares of Imation's common stock that have been issued as consideration for the provision of such investment capacity and certain related services by Clinton. Imation has the option to expand the capacity by up to $500 million in exchange for an additional 2,500,000 shares of common stock as well as the option to extend the initial term for two subsequent one-year periods in exchange for $1.75 million per year (or $2.5 million per year if the capacity expansion has been exercised).
The Transaction was structured to provide for the quick and efficient scaling of an asset management business designed to provide investors with access to quantitative equity strategies. By partnering with Clinton and leveraging its proven technology-driven strategy, GlassBridge will bypass traditional seeding models, which typically include a lengthy roll out and substantial costs. GlassBridge intends to use algorithms and other quantitative strategies with the goal of achieving consistent, competitive risk-adjusted returns for GlassBridge's investors. In addition, over the past two months, Imation has taken steps to build its own independent organizational foundation while utilizing Clinton's abilities and infrastructure. While GlassBridge's intention is to primarily engage in the management of third-party assets, it may opportunistically make proprietary investments from time to time.
Imation believes that its status as a public reporting company is an ideal platform from which to grow an asset management business. The existing reporting, compliance and other regulatory requirements to which Imation is subject provide transparency, which is intended to provide investors with insight, scrutiny and comfort. In addition, Imation's excess cash provides the potential to seed new investment strategies and effectuate accretive acquisitions.
"Over the past two years, Imation has undergone a significant transformation – eliminating money losing businesses and harvesting capital from non-core assets. The closing of this transaction and our new operating structure as a publicly-traded alternative asset manager furthers our evolution," said Joseph A. De Perio, Non-Executive Chairman of the Board of Directors of Imation. "In consummating this transaction with Clinton, we have established a turnkey business in GlassBridge that we believe will be the foundation for an enterprise that will deliver significant value creation for stockholders over the long term. We thank stockholders for their tremendous support and are excited to focus on the future and execution of our plan."
On February 2, 2017, Imation's Board of Directors appointed Danny Zheng as Interim Chief Executive Officer of Imation. Mr. Zheng will continue in his role as Chief Financial Officer and will serve the Interim Chief Executive Officer until the Board of Directors appoints a new CEO. The Board of Directors is working with a nationally recognized executive search firm, focused exclusively on the placement of talent in the asset management industry, to identify strong CEO candidates. Mr. Zheng's appointment follows Robert B. Fernander's resignation as Imation's Interim CEO and director on February 2, 2017.
As part of the strategic initiative that led to the launch of GlassBridge, and as previously announced, Imation closed its transaction with NXSN Acquisition Corp. ("NXSN"), an affiliate of Spear Point Capital Management LLC, pursuant to which all of the issued and outstanding common stock of Nexsan Corporation ("Nexsan") was sold to NXSN in exchange for 50% of the issued and outstanding common stock of NXSN and a $25 million senior secured convertible promissory note. In connection with the closing of this transaction, Mr. Fernander was appointed CEO of Nexsan.