Eastman Kodak Co. company Friday said it will sell its OLED displays business.
The company (NYSE: EK) plans to sell substantially all the assets associated with organic light-emitting diodes to a group of LG Corp. companies. Financial details of the deal were not disclosed.
The OLED business employees 60 people companywide, primarily researchers, with the overwhelming majority in Rochester, a spokesman said.
The move tightens Kodak’s investment focus and strengthens its financial position, the company said.
Kodak shares were up 4 percent Friday morning at $4.37 a share
Scientists at Kodak developed the world’s first viable OLED material in the 1970s. The company will continue to have access to its OLED technology for use in its products, officials said.
The deal is expected to close by the end of the year.
“As we said earlier this year, OLED is one of the businesses we wanted to reposition to maximize Kodak’s competitive advantage at the intersection of materials and imaging science,” said Laura Quatela, Kodak’s chief intellectual property officer and manager of the company’s OLED business.
“This action is consistent with that strategy. Our OLED intellectual property portfolio is fundamental; however, realizing the full value of this business would have required significant investment.”
Kodak earlier this year listed the OLED operation as one the company was looking at for strategic alternatives. The company can now use its cash for investments in other parts of the business.
“OLED is promising technology. But it is no sure bet that it is going to be the next big thing,” Kodak spokesman Christopher Veronda said.
The display and lighting business is not one of Kodak’s core businesses and it would have taken a great deal more investment to succeed in it, he added. The potential also carried risk.
Kodak also Friday said it entered into a technology cross-license agreement with LG Electronics Inc., which will allow each company broad access to the other’s patent portfolio. The license agreement, which provides significant benefits to both companies, is royalty-bearing to Kodak. Additional financial details were not disclosed.
As part of that agreement, the companies agreed to conclude their ongoing patent litigation, which involved a subset of their imaging technologies, Kodak said. Pursuant to a settlement agreement, Kodak and LG will request the U.S. International Trade Commission terminate the investigations initiated earlier this year following complaints filed by both companies in late 2008.
Veronda said the two deals announced Friday are separate and evolved separately.
“We are pleased to put a resolution to both,” he said.
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