By David Ward, San Diego Tuesday, 16 April 2013
Kodak announced this week it has agreed to sell assets from its Document Imaging business to office equipment maker Brother Industries in a cash deal worth $210m.
Under the terms of the deal Brother has also agreed to assumed liability for deferred service revenue from the Document Imaging business, adding another $67m to the final price.
The deal means that Kodak’s once-vibrant business for scanners, image-capture software and technical services will now be combined with Brother’s office equipment business that includes fax machines and small all-in-one printers.
Kodak entered Chapter 11 bankruptcy protection in January 2012 and so this proposed sale will need the approval of US Bankruptcy Court, which is expected at a hearing later this month.
Once that approval is given, an auction with Brother as the “stalking horse”, or initial bidder, will be run. But others bidders could come forward at that time and conceivably offer more for the Document Imaging assets and business.
“This proposed sale is another key step in Kodak’s path to emergence – it moves us closer to realizing our strategic vision for Kodak’s future,” Kodak Chairman/CEO Antonio Perez said in a statement. “A sale to Brother, should they prevail, would represent an excellent outcome for Document Imaging’s customers, partners and employees.”
In addition to selling the Document Imaging business, Kodak had also previously indicated plans to sell its Personalised Imaging division, which includes its consumer film, photo paper, finishing and photo kiosk businesses. However, there is currently no timetable for when that sale might occur. In December, Kodak also sold a large portion of its digital-imaging patents for about $525m.
Last month Kodak finalised a previously-announced $848m finance facility with members of the Steering Committee of the Second Lien Noteholders and other holders of Kodak’s Senior Secured Notes. Under the terms of the deal Kodak has borrowed an aggregate principal amount of approximately $473m and converted $375m in Senior Secured Notes into loans.
The agreement also lowered the amount of money the company needed to get from the sale of its noncommercial-imaging business to $600m.
In an interview with PrintWeek, Kodak Corporate Communications Manager Christopher Veronda said Kodak’s Document Imaging employees, including a number based in Rochester that focus on R&D, will be joining Brother as part of the deal.
Veronda suggested the sale price for the Document Imaging assets was enough to ensure the company can continue on with its plans to exit bankruptcy this year. “The next step will be to file a plan of reorganisation (with the US Bankruptcy Court) and we plan to do that by the end of the month,” he added.
- Kodak to sell Document Imaging business to Brother (printweek.com)