London-based Danka Business Systems has become Kodak's principal global distributor for office printers and copiers, as part of its acquisition of Kodak's office imaging services business.
Danka has bought the sales, marketing, and equipment service operations of Kodak's Office Imaging business, as well as its facilities management business, formerly known as Kodak Imaging Services. It paid $688 million in cash for the operations.
Dan Doyle, chief executive of Danka, claimed the partnership had created "a worldwide office imaging powerhouse". His company now becomes the principal distributor of Kodak-branded copiers and printers worldwide. Kodak retains its manufacturing and research and development functions in this area.
As of 31 December, when the deal was finalised, the net assets of the Office Imaging and facilities management businesses were about $800 million, with revenues of $1.8 billion and pre-tax profits of $25 million. Kodak did not specify how much of this came from services.
The acquisition was funded exclusively with bank debt under a six-year, $1.275 billion credit facility, which was also used to refinance Danka's existing debt and as working capital. Danka also expects to take a one-time restructuring charge of $25-$35 million in its third quarter, ended 31 December, to pay for integration of the new units. It would not comment on whether some of this money would go on redundancies.
Kodak's assistant chief operating officer, Carl Kohrt, said: "We believe this acquisition will increase access to the market for Kodak-branded office imaging products, which will be fed by a continuing stream of new and improved products designed, developed and manufactured by Kodak. In addition, Danka's acquisition of our sales, marketing and facilities management operations will place our sales and service people in a growing organisation that is devoted exclusively to providing solutions for the office."
Along with Kodak's continued investment in research and development, Danka will fund over $150 million for ongoing research and development.
Peter Meier, previously general manager of Kodak's Office Imaging in the Emea region, now becomes president of the Office Imaging business worldwide, reporting to Danka's Doyle. The facilities management business will be managed separately by Ed Marino.
Danka, which has a US headquarters in St Petersburg, Florida, is a distributor of office equipment and related services. Following the acquisition it will employ 22,000 people in 700 offices.
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