Sun Chemical Corp., the Fort Lee, N.J., subsidiary of an international ink and pigment supplier, and Kodak each now owns half of the joint venture established in 1998. According to the companies, the deal will boost Kodak sales and earnings and expand the global distribution network for its Graphic Communications Group's digital printing systems.
Kodak Chairman and CEO Daniel A. Carp called the transaction "another decisive step in the implementation of our digitally oriented growth strategy." Kodak initially plans to operate KPG as a subsidiary within its Graphic Communications Group, where it will join the inkjet printer and color digital press businesses.
Subject to regulatory (but not shareholder) approval, the transaction is expected to close in April. Kodak is to redeem all Sun Chemical's KPG shares by providing $317 million in cash at closing, $200 million in cash in the third quarter of 2006, and $50 million in cash annually from 2008 through 2013. Kodak will fund the redemption through internally generated cash flow.
KPG expects to show 2004 revenues of $1.7 billion, and Kodak said it expects this transaction to add approximately $1.1 billion to its 2005 revenue, reflecting approximately nine months of Kodak ownership and elimination of Kodak-to-KPG intercompany sales.
Based in Norwalk, Conn., KPG employs 4,000 people on six continents, supplying computer-to-plate and monitor- and remote-proofing solutions, graphic arts film, conventional litho plates, and digital color proofing products.
Kodak said it will retain KPG management under CEO Jeff Jacobson, who will report to James Langley, Graphic Communications Group president and Kodak senior vice president.
Kodak plans to integrate various operations across its Graphic Communications subsidiaries, and said its Document Products and Services operations (high-speed scanners, office equipment maintenance) will be integrated into the Graphic Communications Group by the end of this month.
Apart from photo and repro films, Kodak has brought to the newspaper market Versamark ink jet printers, color scanners, color proofers, color-processing workstations, an early Nikon-based digital camera designed with the Associated Press. Probably no product line kept it in the market longer than that of Atex, which it acquired from the founders and held onto for about 10 mostly money-losing years. KPG makes Kodak a major player in newspaper CTP, with digital plates and thermal platesetters, as well as newer offerings in data storage and color management.
By: E&P Staff Eastman Kodak Co. of Rochester, N.Y., announced yesterday that it is buying out its partner in Kodak Polychrome Graphics for $817 million.