Kodak has announced that it’s begun a process to sell its Flexographic Packaging Division utilizing UBS Investment Bank as the 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 past 12 months, FPD reported revenues of $150 million and operational EBITDA of $33 million. During this period, FPD demonstrated strong growth, achieving a 9% increase in revenue and 18% operational EBITDA growth, said the company. FPD currently employs about 300 people. During the sale process, Kodak said it will continue to make significant investments in FPD by expanding manufacturing capacity, developing advanced technology, and adding employees to meet customer needs. 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’ve received in the Flexographic Packaging Division,” said Kodak CEO Jeffrey J. Clarke. “FPD has performed exceptionally well over the past 5 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. 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,” he added.
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. This would permit the company to pursue the sale process of FPD in a thoughtful manner in order to achieve maximum value for shareholders, said the company. Net proceeds from the sale of FPD will first be used to repay this loan. Moving forward, Kodak will continue to focus on its proven growth areas of Sonora environmental plates, enterprise inkjet, workflow software and brand licensing.
Kodak to sell its Flexographic Packaging Division
