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By Simon Robinson

Imation (NYSE:IMN), a company perhaps best known for selling consumer CDs and DVDs, has announced that it has acquired 14-year-old storage systems specialist Nexsan for $120 million in cash and stock.

Though Nexsan has been seeking a buyer for some time, the company has a good-sized and well-established business serving SMBs and enterprises. Imation, which says the purchase is part of its own strategic transformation that has seen it focus on storage and security, plans to use the move as a platform to begin targeting this audience more directly with Nexsan's range of purpose-built storage systems and appliances.

Under terms, Imation is handing over $105 million in cash and $15 million in stock. We understand that Nexsan generated revenue of about $90 million in 2012, meaning Imation is paying roughly 1.3 times trailing sales.

The acquisition of Nexsan is the largest purchase Imation has done in a half-decade and substantially thins its treasury. At the end of September, Imation, which is burning cash, had $186 million in cash and equivalents. (Click here to see our full report.)

Source: Imation Continues Storage Push With Nexsan Acquisition