In addition, as part of the transaction, Scitex will retain US$12m of SDP’s expected US$22m cash balance at closing, producing a total cash consideration for the transaction of US$262m.
This figure was precisely what Scitex had been hoping for, after knocking back an offer from Océ of US$200m on the grounds that it would be underselling the company by US$50m, according to Nachum “Homi” Shamir, Scitex president and CEO. Other rumoured suitors for the company were Fuji Xerox, with which Scitex has an existing distribution agreement in Europe, and Heidelberg. Shamir had originally insisted that SDP was not for sale.
Shamir says, “We believe this transaction creates significant value for Scitex’s shareholders, in the spirit of our public statements since the appointment of the new leadership at Scitex and the realignment of our board to reflect the new ownership of IDB Group. Kodak is a terrific strategic fit for SDP and I am very excited about the future of this business under Kodak’s stewardship.”
Shamir, who is also president of SDP, along with his SDP management team are expected to join Kodak’s management and continue to lead the business under the Kodak corporate structure.
Kodak expects to fund the acquisition from available cash with no incremental borrowing, and anticipates SDP’s operations to add approximately US$190m in revenue in its first full year as a wholly owned Kodak subsidiary.
Daniel Carp, Eastman Kodak chairman and CEO, says, “We are moving decisively to implement our growth strategy by expanding into a range of commercial digital businesses. One part of that strategy is to acquire in a disciplined manner companies and technologies that complement our existing businesses, capabilities and assets. The acquisition of Scitex Digital Printing is a prime example of how we intend to build upon inkjet technology developed on our own to build business in growing market segments.”
“This is the first of several actions Kodak will take to expand our participation in the digital commercial printing industry.”
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