Kodak to sell copier division

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Eastman Kodak Co. today said it will sell its digital printer, copier and roller assembly operations to Heidelberger Drucksmaschinen AG, a German company primarily devoted to offset printing.
Kodak and Heidelberg have, since 1997, shared a venture in NexPress Solutions LLC, a company headquartered here, with a wholly owned subsidiary in Kiel, Germany, and a facility in Stuttgart. NexPress is devoted to creating the next generation of digital color printing for customized and personalized uses.
The financial details of the sale were not disclosed, but analysts told the Wall Street Journal in a story today that it was valued at about $200 million.
Kodak should be pleased to get rid of the poorly performing unit–while Heidelberg has reason to appreciate the new addition, one analyst said.
“This has been an operation that has been a sore spot for quite a number of years,” said Ulysses Yannas, an analyst with Mercer, Bokert, Buckman & Reid Inc. in New York City. “It takes (the copier division) off Kodak’s books, puts some money in the till, eliminates sales–some good, some bad.”
Meanwhile, Heidelberg, keeping an eye on the rise of digital printing and the competition it presents for offset printing, “decided to hedge its bets,” Yannas said.
Yannas, in the print edition of the Rochester Business Journal, had suggested earlier that Kodak would merge the rest of the copier division into the NexPress joint venture.
NexPress will expand to include the black and white electrophotographic business. Kodak will contribute research and development resources to NexPress, as well as toner and developer operations in Rochester and Kirkby, England. At least 1,500 jobs will be transferred from Kodak to Heidelberg and NexPress, but operations will remain in their current locations, the companies said.
Heidelberg will produce copier-duplicators, printer engines and other parts for NexPress, and the companies expected that NexPress would supply products to Danka Business Systems PLC, among other channels. Danka acquired the sales and service section of Kodak Office Imaging in 1996 while Kodak continued to evaluate how to deal with the rest of the division. Danka, with headquarters in London and St. Petersburg, Fla., is an independent supplier of office equipment and related services.
“This agreement dramatically increases the value of NexPress as a developer and supplier of color high-speed digital printers, as well as black-and-white copier-duplicators and printers,” said Patrick Siewert, president of Kodak Professional. “It enables Kodak to leverage our core competencies in materials for use in electrophotographic products, while building on Heidelberg’s leadership in equipment manufacturing and digital printing.”
Kodak and Heidelberg expected the transaction to be completed in April.

3/17/99