Oakdale, Minn. (August 28, 1996) -- Imation Corp. (NYSE: IMN), the new imaging and information company recently spun-off from 3M, today announced that it has reached agreement to acquire Luminous Corporation of Seattle, Wash., a leading developer and marketer of desktop software to the prepress, print production, printing and graphic arts industries. Luminous will become a wholly-owned subsidiary of Imation Corp.

The acquisition will provide Imation -- which already has a strong digital capability through its Rainbow^TM digital color proofing systems and Color Locking Software -- with the added strength of Luminous' portfolio of market-leading desktop prepress software products and future technology platforms.

The consideration for the acquisition will be paid in the form of cash and Imation common stock accounted for as a purchase, with a portion payable under a performance-based incentive compensation plan for Luminous employees. Imation will accelerate amortization of the goodwill acquired in the range of $10 - $12 million in 1996. Without the goodwill amortization, there would be no meaningful impact on Imation's reported operating results for 1996 as a result of the acquisition. The acquisition is expected to contribute positively to Imation's publicly stated economic profit and earnings per share improvement goals. Additional terms of the transaction, which is expected to be completed in October, were not disclosed.

According to Bill Monahan, chairman and chief executive officer, Imation Corp., the acquisition will significantly strengthen Imation's position in the expanding market for digital workflow processes and products in the printing industry.

"Our acquisition of Luminous is part of Imation's strategy of broadening our technology and marketing position to deliver high value imaging and information solutions to our customers," said Monahan. "We see numerous opportunities to increase sales of Luminous' products through our worldwide network of distributors and resellers. Longer term, we are confident that those customers moving to increasingly automated, digital workflow environments will benefit from our expanding imaging and information solution capabilities."

Imation also will continue to market its line of conventional prepress products, which have set the industry standard for three decades. The company said it plans to continue to invest in the development of dry film and Matchprint^® color proofing products to serve the conventional prepress market.

According to Monahan, both companies see a broad range of revenue-generating opportunities outside of the U.S. Luminous currently generates most of its sales in the U.S. Conversely, 50 percent of Imation's total revenues -- and a significant percentage of its digital proofing product sales -- are in Europe, Asia and Latin America.

"This transaction significantly strengthens our collective position in the digital prepress market," said Jim Betlyon, chief executive officer, Luminous Corporation, who will continue as the top executive of the new Imation subsidiary. "By integrating Luminous' proven software development, existing product portfolio and sales capabilities with Imation's digital proofing, color science, data storage and worldwide market position, we have dramatically improved our ability to meet the needs of a broader range of customers in the printing industry."

 
Automating The Digital Workflow

Product quality, speed and operating efficiency are the primary factors driving purchasing decisions in the printing industry, according to Chuck Oesterlein, vice president, Imation Printing and Publishing Systems.

An increasing number of commercial printing operations are moving their production processes to the desktop to take advantage of improvements in output quality, ease of use, and in the increasing network transmission speeds of desktop publishing prepress software. According to Oesterlein, these companies and others that are already doing digital production are looking for automated workflows that will streamline their operations. This need will significantly increase demand for products that Imation and Luminous currently sell and will develop and market together in the future.

"Luminous' leadership in providing software that accelerates workflow automation -- like its Open Production ENvironment^TM (OPEN) -- strategically complements our current capabilities in providing the other core elements of a digital workflow solution -- color proofing, color management, data storage, and image distribution," said Oesterlein. "This move is consistent with our strategy of supporting our customers as they introduce digital capabilities to their current conventional printing operations."

In addition to OPEN, Luminous' suite of market-leading prepress software includes TrapWise^®, PressWise^®, Color Central^®, and RIPs from its Rip-It^® division. Oesterlein added that the increasing performance of Imation's digital products and Luminous' workflow software and unique developmental and licensing position for Adobe's industry-leading PostScript^® technology, will result in a "rapid migration 'upstream' to address the needs of our largest global customers."

The combination of the two companies will also help meet a wide range of other industry needs, according to John Feikema, business development director, Imation Printing and Publishing Systems.

"As many of our customers and the industry in general move toward digital print production technology, there has been a great need for integrated products and systems, as opposed to individual products that provide only part of the solution," said Feikema.

"Our goal as we move forward is to use our combined expertise to create integrated systems that complete the workflow chain, significantly improve efficiency and output quality, reduce costs, and open up new revenue streams for prepress service providers. This acquisition will help us do just that."

Feikema said that by combining Imation's proofing raster image processor (RIP) technology and color aptitude with Luminous' Rip-It imagesetting RIP expertise, Imation can provide a common RIP family that would drive imagesetters, platesetters and proofers. A common RIP will address customer concerns with the validity of data from RIPs and increase confidence in the quality of the final image.

Imation currently markets several key components of the digital workflow. The company's Rainbow color proofing systems combine proprietary color software with output flexibility to give users an extremely accurate prediction of what an image will look like on press.

The Rainbow system features Adobe PostScript Level 2 technology and color management software for Apple Macintosh^® and PC platforms, with thermal dye-sublimation and inkjet proofers that make proofs directly from Adobe PostScript and other digital file formats. Imation also provides data distribution solutions and connectivity features to enable both efficient remote proofing and color-management from machine to machine and site to site.

Imation also provides solutions which maintain color fidelity throughout the digital workflow, regardless of the source or destination of the color image. Its Color Locking Software offers a color calibration system based on proprietary color technology that provides a numerical method to ensure that Rainbow proofs will provide consistent color, proof to proof and machine to machine. This provides users in remote locations with the confidence that each output point is seeing the same color data.

Imation's competencies in color proofing, color management, and image distribution are bolstered by the company's position as the world's leading manufacturer of branded removable data storage products for digital applications. The company markets a full line of data storage media, including data cartridges, half-inch cartridges, optical disks and CD-ROM disks.

Imation supplies a variety of products and services worldwide for the information processing industry, specializing in imaging applications and information storage. The company manufactures and markets digital and conventional proofing systems, including the industry standard Matchprint color proofing system, imagesetting materials, printing plates, graphic arts films, carbonless paper products and chemistries to customers worldwide.

The business units that make-up Imation had 1995 revenues of $2.2 billion while part of 3M. The company employs approximately 9,700 people worldwide and is based in Oakdale, Minn.

Luminous Corporation, a privately owned company, was founded in early 1996 as a spin-off of Adobe Systems Corporation, and is focused entirely on the needs of prepress and print professionals. The company's mission is to deliver products, services and technologies that support the industry's shift to digital prepress and printing, as well as to expand media production for business intranets and the World Wide Web. The company employs 62 people.

Note To Editors:
Luminous also markets other innovative software for prepress, including:

ColorCentral, the top-selling software for image-replacement and print-management services. Compatible with the Open Prepress Interface (OPI) standard, ColorCentral manages hundreds of images and speeds production by transferring image replacement and print management to a network server. This product recently received the GATF's InterTech Award.

OPEN (Open Production ENvironment), a flexible, modular workflow automation tool for use in many digital production environments, including prepress, multimedia and Internet publishing, or all three. OPEN enables users to automate individual task sequences using off-the-shelf applications and popular scripting languages.

TrapWise, the top-selling software for trapping -- the process of managing the color inks around the edges of objects to ensure high-quality printing.

PressWise, another top-seller, digitally creates printer signatures and impositions.

Rip-It family of imagesetter and plotter RIPs.

Adobe and PostScript are registered trademarks of Adobe Systems Incorporated.

Macintosh and Apple are registered trademarks of Apple Computer Corporation.

Color Central, TrapWise, PressWise and Rip-It are registered trademarks and OPEN is a trademark of Luminous Corporation.

Copyright 1996 Imation. All rights reserved.