ROCHESTER, N.Y., Jan. 12 -- Eastman Kodak Co. announced today it will become the sole owner of Kodak Polychrome Graphics (KPG) through redemption of Sun Chemical Corp.'s 50 percent interest in the joint venture, established in 1998.
Based in Norwalk, Conn., KPG supplies products and services to the graphic communications market, including graphic arts film, conventional lithographic plates and digital color proofing products. KPG's customers include commercial printers, newspapers, publishers and packaging printers. It has approximately 4000 employees worldwide.
Under the terms of the transaction, Kodak will redeem all of Sun Chemical's shares in KPG 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, for a total of $817 million. Kodak will fund the redemption through internally generated cash flow. The transaction is expected to close in April 2005.
Kodak initially plans to operate KPG as a wholly owned subsidiary, part of the company's Graphic Communications Group. The KPG management team will remain intact, with KPG CEO Jeff Jacobson leading the organization and reporting to James Langley, president, Graphic Communications Group and senior vice president, Eastman Kodak.
Kodak said it is developing plans to integrate various operations across its subsidiaries in the Graphic Communications Group and that its Document Products and Services (DPS) operations will be integrated into the Graphic Communications Group by the end of January 2005.
Antonio M. Perez, president and CEO at Eastman Kodak, said, "One of the key elements of our strategy involves smart acquisitions that complement Kodak's existing capabilities and enable us to drive profitable digital growth. Bringing KPG together with Kodak's existing graphic communications businesses -- Kodak Versamark, NexPress and Encad -- will enhance our operations, extend significantly our coverage worldwide, complement our present portfolio, and strengthen Kodak's ability to serve our customers in the fast-growing graphic communications market."
The agreement is subject to customary regulatory approvals and does not require shareholder approval from either Kodak or Sun Chemical.
Kodak also announced this week it has named William J. Lloyd as CTO and director, Research & Development, effective Feb. 28. Lloyd, who joined Kodak in June of 2003, had been director of the Inkjet Systems Program. A vice president of the company, he will begin the transition to his new duties immediately. He succeeds James C. Stoffel, who is retiring at the end of February 2005.
For more information, visit: www.kodak.com