Ko­dak gets $525 mil­lion for dig­i­tal imag­ing patents

Austin American-Statesman - - MONEY & MARKETS - Byan­drew Martin

East­man Ko­dak once de­scribed the sale of 1,100 dig­i­tal imag­ing patents as a wind­fall that could prop up and even save the be­lea­guered com­pany.

On Wed­nes­day, the sale was fi­nally an­nounced, but in­stead of bring­ing as much as $2.6 bil­lion as Ko­dak once pre­dicted, the sell­ing price was far short of that amount, at about $525 mil­lion. The buyer was a con­sor­tium that in­cludes many of the world’s big­gest tech­nol­ogy firms, among them Ap­ple, Google, Face­book and Sam­sung Elec­tron­ics.

Ko­dak of­fi­cials said the sale was an­other cru­cial step to­ward emerg­ing from bank­ruptcy, and turn­ing around a decades­long slide for the Rochester, N.Y.-based cor­po­ra­tion.

“This mon­e­ti­za­tion of patents is an­other ma­jor mile­stone to­ward suc­cess­ful emer­gence,” An­to­nio Perez, Ko­dak’s chief ex­ec­u­tive, said in a news re­lease. “Our progress has ac­cel­er­ated over the past sev­eral weeks as we pre­pare to emerge as a strong, sus­tain­able com­pany.”

Among the ben­e­fits of the sale, Perez noted, was that it would al­low Ko­dak to largely re­pay a debtor-in-pos­ses­sion loan it ob­tained nearly a year ago.

It also sat­is­fied a ma­jor pro­vi­sion for an $830 mil­lion fi­nanc­ing fa­cil­ity, ap­proved in Novem­ber, that re­quired Ko­dak to sell its patent port­fo­lio for no less than $500 mil­lion.

Ko­dak will re­tain a li­cense to use the dig­i­tal imag­ing port­fo­lio patents in its fu­ture busi­nesses, and for those busi­nesses that it is sell­ing.

Part of the sale will be paid by a con­sor­tium of tech­nol­ogy com­pa­nies that was or­ga­nized by In­tel­lec­tual Ven­tures and RPX Corp. The li­censees will re­ceive rights to the dig­i­tal imag­ing patent port­fo­lio and cer­tain other Ko­dak patents.

“No sin­gle com­pany could have com­pleted this deal and by cre­at­ing a con­sor­tium we were able to en­sure that mem­bers get ac­cess to th­ese im­por­tant in­ven­tion rights,” ac­cord­ing to a re­lease by In­tel­lec­tual Ven­tures, a Washington-based firm that in­vests in patents. “The patent mar­ket­place is very ac­tive, and I.V. ex­pects to be in­volved in more com­plex trans­ac­tions like this in the fu­ture.”

Perez said Ko­dak was now fo­cused on build­ing its com­mer­cial imag­ing busi­ness, which in­cludes print­ing and pack­ag­ing for busi­nesses.

The sale is sub­ject to the ap­proval of the bank­ruptcy court.

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