This month Mitsubishi Chemical Corp. decided to sell its legendary Verbatim business unit to CMC Magnetics. Verbatim is primarily known for its recordable optical media, but the company also sells USB flash drives, DAS devices, accessories, and so on.

Under the terms of the agreement, CMC will pay Mitsubishi Chemical $32 million in cash for Verbatim-related assets, including patents, technologies, sales network, and other. Being one of the pioneers of blank floppy disk and optical media, Verbatim owns a large portfolio of IP for discs, including production methods, various coatings, and other technologies. Meanwhile, Mitsubishi Chemical has used the brand to market USB flash drives, SSDs, DAS devices, power banks, various accessories, and even 3D printing filaments. It is unclear whether CMC is also set to get these businesses and whether it intends to keep them running.

CMC has manufactured Verbatim-branded optical media for a while now using Verbatim’s technologies, so change of ownership is not expected to result in change of quality. Meanwhile, since the whole Verbatim supply chain will now belong to CMC, it is possible to expect the media to get slightly cheaper. Furthermore, with IP from Verbatim, CMC will be able to improve its own-brand products without paying for a license.

The acquisition of Verbatim’s assets by CMC is a yet another sign of consolidation of the optical media market as sales of both blank media and discs with movies shrink. Mitsubishi Chemical no longer sees new opportunities with CD/DVD/Blu-ray media, which is why it is selling not only the brand, but all of the related assets. Mitsubishi is not the only company to exit optical disc media in the recent years. Such legendary names as Taiyo Yuden, TDK, Maxell, Fujifilm, BASF, and other decided to withdraw from this business in the last ~10 years. While some of the aforementioned brands still exist on the market, they are not produced by the original owners.

CMC is one of the world’s largest producers of optical media with operations in China, Taiwan, Thailand, and the US. The discs the company produces are then sold under other brands (HP, Verbatim, etc.) or are used by high-volume commercial customers like movie studios for replication purposes. Besides, the company offers custom packaging services for optical media, something also used primarily by large studios nowadays.

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Source: Mitsubishi Chemical Holdings Group