Kodak has a NEW buyer for Document Imaging

Anne Valaitis
May 1, 2013

Kodak to sell its Document Imaging business to U.K Kodak Pension Plan

Kodak has entered into an agreement whereby it will sell off its Document Imaging and Personalized Imaging business units to U.K Kodak Pension Plan, KPP. As part of the continued restructure to exit bankruptcy, Kodak will sell off its Document Imaging business for $650m in cash and non-cash consideration. Overall, the agreement settles approximately $2.8 billion of claims by the defined benefit (DB) pension plan against Kodak and certain of its affiliates.

This will provide to Kodak a more lucrative outcome than the previously proposed offer last week by Brother ($210m). According to Dolores Kruchten, President, Document Imaging and Vice President, Eastman Kodak Company “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.”

Steven Ross, Chairman of KPP, said, “KPP and Kodak have been working collaboratively since the beginning of the case, and this acquisition provides security for and delivers the greatest value to, the KPP members. Overall, this settlement gives the KPP members greatly improved future prospects whilst being good for Kodak’s employees, its creditors and for UK businesses.
“The businesses that we are acquiring will deliver long-term cash flows to support the plan’s obligations. The financial stability that KPP will provide for the Personalized Imaging and Document Imaging businesses will be beneficial to those businesses’ employees, customers and partners.”

Certainly, for the existing Kodak DI business, this seems to be the most attractive resolution in a delicate matter, which provides for the future of Kodak document imaging solutions. No answer to where the new business will be located and what will become of the Rochester operations, but InfoTrends has been told that DI will be able to retain perpetual rights to the Kodak brand and the new company will maintain some partial brand that denotes Kodak as well. The new company will act independently under the new KPP ownership and will be overseen in a similar manner as the DI business is currently.

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