Scitex Corp. sold its Scitex Digital Printing unit to Eastman Kodak Co. for $250 million in cash. Under the terms of the sale, the Israel-based company will retain $12 million of the digital printing unit's expected $22 million cash balance at closing, producing a total cash consideration for the transaction of $262 million.
Kodak's acquisition of the high-speed digital printing technology unit falls in line with Kodak's determination to move toward digital photography and away from film, a strategy the Rochester, N.Y.- based company outlined earlier this year.
"We are moving decisively to implement our growth strategy by expanding into a range of commercial digital businesses," says Daniel Carp, CEO of Eastman Kodak. "This is the first of several actions Kodak will take to expand our participation in the digital commercial printing industry."
Once the sale is finalized Scitex will distribute a significant amount of the proceeds to its shareholders, company officials say. Scitex will use the balance of the funds to satisfy tax and other obligations in the U.S. and to invest mainly in Scitex's remaining business activities.
"We believe this transaction creates significant value for Scitex's shareholders," says Nachum Shamir, president and CEO of Scitex Corp., "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."
Shamir remains with Scitex Digital Printing and retains his management team, which will run the company as part of the Kodak corporate structure.