Kodak Buys ENCAD for $25 Million
Friday, November 16, 2001
ROCHESTER, N.Y./SAN DIEGO, CA.--Nov. 15, 2001--Eastman Kodak Company announced today that it will acquire ENCAD, Inc., a leading manufacturer and pioneer of wide-format inkjet printers, for approximately $25 million. The purchase price will be paid in Kodak stock or, under certain circumstances and at Kodak's option, in cash. ENCAD will become a wholly-owned subsidiary of Kodak. The acquisition makes Kodak one of the top three sellers of wide-format inkjet products, a $2.4 billion output market growing at approximately 15% annually. Based on Kodak projections and industry estimates, the transaction is expected to contribute to earnings beginning in 2003. The acquisition provides customers with a single source for a variety of digital image printing technology. This includes a full portfolio of wide-format color inkjet printers, software, inks and media. "By combining research and development, proven technology, product excellence and channel access of both companies, Kodak anticipates increased growth in the thriving commercial inkjet market by providing customers with a wider range of products,'' said Daniel A. Carp, Kodak's Chairman and Chief Executive Officer. "The acquisition supports our initiatives for continued growth in output and allows us to capitalize on the expanding infoimaging market.'' Kodak's expansion in the fast-growth, large-format display segment is another example of the company's involvement in and influence on infoimaging--the $225 billion industry created by the convergence of images and information technology. Infoimaging comprises three closely-related imaging markets: devices, such as wide-format inkjet printers, infrastructure and services / media, such as the inks and output capabilities enabled by this acquisition. "This combination will strengthen our wide-format inkjet business, which is growing at double-digit rates, and leverage Kodak's core capabilities in inks and media,'' said Karel Czanderna, Vice President, Eastman Kodak Company. "In addition to the customer base we have long served, we will now pursue multibillion-dollar markets ranging from retail point-of-sale to office decor. ENCAD's integration capabilities and customer relationships will help us to accelerate profitable participation in these promising areas.'' "We're very excited about becoming a part of the world's largest imaging company,'' said Terry Vandewarker, President and CEO of ENCAD. "Kodak has the global resources, complementary expertise and multi-national market presence we need to accelerate growth in ENCAD's products, services and well-established customer base. Combining the two companies' state-of-the-art skills, product portfolios and knowledge means more customers around the world will have a greater choice of leading products that can be delivered to them faster.'' Kodak expects the transaction will close early 2002, pending receipt of regulatory clearances and ENCAD shareholder approval. The merger agreement contains customary closing conditions and termination rights in favor of each party under certain circumstances. The acquisition builds on the recent successful introduction of the Kodak Professional 5260 Inkjet Printer. The 5260 is the first in a new line of Kodak-designed high-speed, wide-format inkjet printers that employs piezo inkjet print head technology, six colors and DYNAMIC CONTONE printing. Because of the overwhelming demand for this market-leading production inkjet printing system, all 2001 shipments will be in Asia and Europe, with a U.S. sales launch beginning first quarter 2002. Eastman Kodak Company and infoimaging Eastman Kodak Company is the world's leader in helping people and businesses take, share, store and print pictures - traditional or digital. Kodak's sales last year of nearly $14 billion were divided between consumer and commercial products and services, such as professional and consumer digital cameras, laser images for radiologists, photographic films for professionals and amateurs, digital services for cinematographers, high speed document scanners and aerial images. Kodak is a leading participant in infoimaging, a $225 billion industry created by the convergence of images and information technology which unites three closely related imaging markets - devices, infrastructure and services/media, enabling people or businesses to easily take and share pictures as information, entertainment or memories. ENCAD, Inc. ENCAD, Inc., a leading innovator in digital image printing technology, offers a broad line of wide-format color inkjet printers, software utilities, and a complete selection of system tested indoor and outdoor inks and media. ENCAD's products deliver superior color images quickly and cost-effectively and are designed to increase user productivity in a variety of applications including point of purchase graphics, photographic enlargement, graphic arts, fine art, textile design, and computer-aided design. The company's products are sold and serviced through a worldwide network of distributors and value-added resellers.