Proceeds will first be used to repay outstanding debt; Kodak will focus on demonstrated growth areas of SONORA environmental plates, enterprise inkjet, workflow software and brand licensing
Rochester, NY, Thursday, August 09, 2018 --
Kodak announced today it has begun a process to sell its Flexographic Packaging Division. The company has engaged UBS Investment Bank as its financial adviser for the transaction.
Kodak’s Flexographic Packaging Division (FPD) produces and markets the FLEXCEL NX system of flexographic imaging equipment, printing plates, consumables and related services. For the last twelve months, FPD reported revenues of $150 million and Operational EBITDA of $33 million. During this period, FPD has demonstrated strong growth, achieving a 9 percent increase in revenue and 18 percent Operational EBITDA growth. FPD currently employs a staff of approximately 300 people.
During the sale process, Kodak will continue to make significant investments in FPD by expanding manufacturing capacity, developing advanced technology and increasing its headcount to meet customer needs.
Flexography is a form of printing which uses flexible plates to print on a wide variety of packaging substrates, including plastic, metallic films, cellophane, and paper. Kodak’s FLEXCEL NX platform uses proprietary imaging technology to provide consistent, high-quality print with maximum on-press efficiency across the full gamut of flexography applications.
“This is a great opportunity to unlock value for shareholders given the strong interest we have received in the Flexographic Packaging Division. FPD has performed exceptionally well over the past five years and has become a significant player in the industry. This business is an excellent example of Kodak incubating and bringing disruptive innovation to the marketplace. Kodak has been evaluating monetization opportunities for the last several years in order to deleverage the company and we believe this is the right time to monetize this valuable asset,” said Kodak CEO Jeff Clarke.
“Following this transaction, Kodak’s improved capital structure will allow us to increase our focus on demonstrated growth engines, while continuing to invest in and provide solutions across the commercial printing, film, and advanced materials industries,” said Clarke.
Kodak also announced it had entered into a non-binding letter of intent for a $400 million, 18-month loan with an existing term loan lender which would refinance its existing term debt, which would permit the company to pursue the sale process of FPD in a thoughtful manner in order to achieve maximum value for shareholders. Net proceeds from the sale of FPD will first be used to repay this loan.
The Company will continue to focus on the demonstrated growth areas of SONORA environmental plates, enterprise inkjet, workflow software and brand licensing. Each of these businesses has delivered growth, profitability and strong margins. The Company is well positioned for the future by leveraging these growth engines and continuing to maximize value in print systems, film and advanced materials.