*NEWS*KODAK:$3BILLION IN ACQUISITIONS

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*NEWS*KODAK:$3BILLION IN ACQUISITIONS

 user 2005-02-21 at 9:43:00 am Views: 65
  • #10417

    Kodak, winding up $3 billion acquisition spree, is buying
    Canada’s Creo Inc.

    Rochester,NY- ROCHESTER, N.Y-Eastman Kodak Co., wrapping up a $3
    billion shopping spree aimed at transforming the world’s biggest film
    manufacturer into a digital heavyweight in photography,medical imaging and
    commercial printing,is buying Canada’s Creo Inc. for $980 million. Kodak said
    Monday its acquisition of Vancouver-based Creo,the world’s biggest maker of
    printer software, will modestly dilute its earnings this year but will not alter
    its full-year profit projections of $2.60 to $2.90 a share. Acknowledging that
    its chemical-based businesses, led by silver-halide film, were in irreversible
    decline, Kodak launched an ambitious strategy in September 2003 to delve deeply
    into growth markets in the digital imaging realm. Commercial printing
    “represents one of the three pillars of Kodak’s digitally oriented growth
    strategy,” said Kodak’s chief executive, Daniel Carp. “The purchase of Creo
    strengthens that pillar, and essentially concludes the company’s acquisition
    plan.” Kodak will pay $980 million in cash, or $16.50 per share, for all the
    outstanding shares of Creo, which had about $85 million of cash on its balance
    sheet and no debt. The deal has been approved by each company’s board of
    directors. Creo shares rose $1.82, or 12.7%, to close at $16.18 in Monday
    trading on the Nasdaq Stock Market. Kodak shares rose $0.39to close at $33.09 on
    the New York Stock Exchange. Creo’s software manages the movement of text,
    graphics and images from the computer screen to the printing press. Kodak, which
    employs nearly 55,000 people, expects Creo will add at least 5 cents a share to
    operating earnings in 2006 and about $700 million in sales. Creo had sales of
    $636 million in its 2004 fiscal year and about 4,000 employees. On Jan. 12,
    Kodak said it was paying $817 million for Sun Chemical Corp.’s 50% stake in a
    jointly owned commercial graphic arts business. Acquiring all of Kodak
    Polychrome Graphics, a joint venture started in 1998, will boost Kodak’s
    revenues by about $1.1 billion, operating profits by 8 cents a share in 2005 and
    expand Kodak’s global distribution network for digital printing systems, the
    company said. Kodak grew into a photography icon on the strength of its
    traditional film, paper and photofinishing businesses, but the 124 year-old
    company is now betting its future on filmless technology, from cameras and
    online photofinishing to minilabs and X-ray systems. Digital products and
    services accounted for around $5.5 billion of Kodak’s sales in 2004, but will
    vault as high as $8 billion this year. Chemical-based businesses will account
    for around $6.6 billion in 2005, down from $8 billion last year, Kodak
    predicted. Kodak ended 2004 with $1.25 billion in cash on its balance sheet and
    will finance the Creo deal by issuing debt. “We have every confidence that we
    will have ready access to the debt markets to finance this acquisition,” said
    Robert Brust, Kodak’s chief financial officer. In October, Creo said it was
    reviewing strategic alternatives,including acquisitions, alliances and the sale
    of all or parts of its business. In recent weeks,a dissident shareholder group
    that owns 5.8 percent of Creo shares sought to nominate a slate of directors at
    an annual meeting in February to Replace the company’s management team.