Kodak is hoping to sell its document imaging business for $210 million. The company has reached a tentative deal with Brother Industries that would see them take over operation of the portfolio of scanners, capture software and services.
In addition, Japan-based Brother would also assume the business’ deferred service revenue liability which totaled approximately $67 million at the end of 2012.
“The 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,” says Kodak spokesperson Chris Veronda. He says they are happy with the deal, but there is a chance they could get more for the business. The deal is subject to a marketing period in which Kodak retains the ability to look for a better or higher bid for the operation.
“We haven’t set any expectations for what we would receive for the specific Document Imaging business. What we have committed to is for all of our asset sales to total $600 million,” Veronda says.
“There is a marketing period that gives us a chance to pursue higher or better offers and then also there would be an auction which again would be another opportunity to receive a better offer.”
Kodak went into chapter 11 bankruptcy in January 2012 and has cut back its workforce considerably since then. The company declined to release the number of employees who will be affected by the sale of the document imaging operation. The company employs 13,000 people worldwide, with 3,500 employees in Rochester.
“The largest concentration of employees in the business is based in Rochester,” Veronda says.
“In this case, Brother has indicated that they value the team and it would stay largely intact.”
The business is one of two operations Kodak is selling as part of its bid to exit Chapter 11 bankruptcy. It’s personalized imaging business which includes photographic film and photo paper, is still on the market as the company restructures itself as a commercial printer.
“There has been strong interest in the personalized imaging business which is the other large business that we’re seeking to sell, but that process is ongoing.”
Brother Industries makes laser, label and multi-function printers, as well as fax machines and sewing machines. The company says this deal would help to boost its global competitiveness in the document imaging market.
Kodak’s Chris Veronda says the agreement is a positive step towards the company’s emergence from chapter 11.
“It is an excellent outcome for our Document Imaging customers, partners and employees. And we’re confident that the document imaging business will continues to thrive under its new owners.”
The deal is subject to approval by the U.S. Bankruptcy Court.