Eastman Kodak Company reached an agreement with the UK-based Kodak Pension Plan (KPP) for KPP to purchase Kodak’s Document Imaging (DI) and Personalized Imaging (PI) businesses for $650 million. This agreement also settles about $2.8 billion of claims by KPP against Kodak and certain affiliates, according to the company. Other proceeds will be used to support Kodak’s recovery from Chapter 11 and grow its Commercial Imaging business. The agreement will involve about 3,450 current DI and PI employees, including those in sales, service, manufacturing and R&D. The businesses will be able to retain the “Kodak” brand and can use “Kodak” in the new company name under the new ownership. Although the agreement must be approved by the court, the company expects the closing to be in the third quarter of 2013. Kodak Pension Plan is privately held and is Kodak’s largest non-secure creditor.
After sharing this news with the press, Dolores Kruchten, president of Kodak Document Imaging business and vice president of Eastman Kodak Company, released the following statement, “Acquisition by KPP is an extremely positive outcome for Document Imaging’s customers, partners and employees. We are confident that the Document Imaging business will continue to thrive with its new owner. There will be no diversion in strategy or challenges to integrate with another company. KPP sees this as a key element of their long-term strategy. They have the capacity to ensure investment in the business and will actively support plans for growth and development. Plus, the sale of Document Imaging and Personalized Imaging to KPP will result in a more efficient separation from Kodak; instead of working with multiple buyers there will be just one closing and one set of transition services.”
Kodak filed this agreement with the Bankruptcy Court on April 30th, and will withdraw the previously-filed motion for the standalone sale of the DI business. Brother Industries, Ltd. made the initial, or, “stalking horse,” bid for the sale of Kodak’s Document Imaging business for a cash price of about $210 million. Brother currently sells two ADF-equipped standalone scanners. The purchase of Kodak’s Document Imaging business would have been a significant expansion into the scanner market.
In response, Brother released the following statement, “Regardless of Kodak’s decision to terminate this agreement, Brother remains committed to continually expanding and enhancing its product and service offerings. As previously announced, Brother has resources set aside for strategic acquisitions and investments and is continuing to selectively explore acquisitions and investments that fit the company’s growth strategy.”
Kodak’s Document Imaging business includes 20+ scanners and software solutions, many of which have earned BLI “Pick” awards. In fact, Kodak earned BLI’s “Line of the Year” award for its scanner line during the Winter 2012 test season. The Personalized Imaging business includes Kodak film, photo paper, photo chemicals and kiosk image printing, among others.
