Eastman Kodak Company has announced that it has entered into an
agreement with Shutterfly, a leading Internet-based social expression
and personal publishing service, for the proposed sale of certain assets
of its KODAK Gallery on-line photo services business for $23.8 million.
The terms of the agreement include the transfer of Gallery customer
accounts and images in the U.S. and Canada to Shutterfly. The agreement
comprises the initial, stalking horse bid in a Court-supervised auction
process under Section 363 of the U.S. Bankruptcy Code that will ensure
the maximization of value for the assets.
“This sale is consistent with our objective of focusing Kodak on a core
set of businesses in which we can most profitably leverage our
technology and brand strengths, and provides a well-proven mechanism for
ensuring that Kodak receives maximum value from these assets," said
Pradeep Jotwani, President, Consumer Businesses and Chief Marketing
Officer. “KODAK Gallery is a unique property, with more than 75 million
users, and an ability to attract new members through innovative customer
offerings such as its category-leading popular mobile apps.”
Jotwani emphasized that under the agreement, Kodak will work closely
with Shutterfly to ensure a smooth transition and that customer photos
will continue to be safeguarded throughout the process.
“We appreciate the loyalty of the KODAK Gallery customers in the U.S.
and Canada who have entrusted us with their photo memories. We know how
much they value their photos, so we will ensure that a transition is
smooth and easy for them, and that their images will be preserved and
protected,” Jotwani said. “We are pleased that under this stalking horse
agreement with Shutterfly, our customers will continue to enjoy a
rewarding on-line photo experience.”
Kodak will give customers who do not want their photos transferred to
Shutterfly the opportunity to opt out of the transition process. Those
customers could then retrieve their images through free downloads or by
purchasing DVDs from KODAK Gallery.
Jotwani noted that Kodak is focusing its consumer business on retail and
destination photo solutions as well as home printing products. “Those
businesses have attractive and growing sales of consumables,” he said.
“We are by far the leader in retail print solutions, with an installed
base that has grown now to 105,000 picture kiosks, while our consumer
inkjet printers offer high-quality, affordable ink.”
Under the terms of the Agreement, Kodak will seek U.S. Bankruptcy Court
approval of sale and auction procedures by late March. Under these
proposed procedures, other potential buyers may submit alternative bids
to Kodak and seek to establish the superiority of their alternative bid.
Kodak is targeting completion of the sale process this spring.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995This document includes “forward–looking statements” as that term is
defined under the Private Securities Litigation Reform Act of 1995.
Forward–looking statements include statements concerning the Company’s
plans, objectives, goals, strategies, future events, future revenue or
performance, capital expenditures, liquidity, financing needs, plans or
business trends, and other information that is not historical
information. When used in this document, the words “estimates,”“expects,”“anticipates,”“projects,”“plans,”“intends,”“believes,”“forecasts,” or future or conditional verbs, such as “will,”“should,”“could,” or “may,” and variations of such words or similar expressions
are intended to identify forward–looking statements. All forward–looking
statements, including, without limitation, management’s examination of
historical operating trends and data are based upon the Company’s
expectations and various assumptions. Future events or results may
differ from those anticipated or expressed in these forward-looking
statements. Important factors that could cause actual events or results
to differ materially from these forward-looking statements include,
among others, the risks and uncertainties as described in more detail in
the Company’s most recent annual report on Form 10–K for the year end
December 31, 2011, under the headings “Business” (Item 1 of Part 1),
“Risk Factors” (Item 1A of Part 1), “Management’s Discussion and
Analysis of Financial Conditions and Results of Operations Liquidity and
Capital Resources” (Item 7 of Part 2), “Notes to Financial Statements”,
and “Cautionary Statement Pursuant to Safe Harbor Provisions of the
Private Litigation Reform Act of 1995”, and those described in filings
made by the Company with the U.S. Bankruptcy Court for the Southern
District of New York and in other filings the Company makes with the SEC
from time to time. There may be other factors that may cause the
Company’s actual results to differ materially from the forward–looking
statements. All forward–looking statements attributable to the Company
or persons acting on its behalf apply only as of the date of this
document, and are expressly qualified in their entirety by the
cautionary statements included in this document. The Company undertakes
no obligation to update or revise forward–looking statements to reflect
events or circumstances that arise after the date made or to reflect the
occurrence of unanticipated events.
Copyright Business Wire 2012
