January 27, 2004 -- (See comments below from WTT's contributing analyst, John Zarwan) -- Kodak Polychrome Graphics (KPG) and RealTimeImage, Inc. (RTI) today announced that they have signed a Letter of Intent for KPG to acquire RealTimeImage's Graphic Arts Division. With completion of the acquisition, the groundbreaking suite of RealTimeProof products for web-based, high-resolution collaborative proofing and approval management will become part of KPG's broad portfolio of proofing solutions, and RealTimeImage will focus on its healthcare imaging operations. "Bringing together the RealTimeProof suite of solutions and the Kodak Polychrome Graphics Matchprint Virtual Proofing System, makes KPG the leader in monitor proofing," said Jeff Jacobson, Chief Executive Officer, KPG. "Customers will have access to the industry's most complete range of monitor proofing options, from soft proofing systems to remote proofing applications to color critical virtual proofing solutions." Jacobson added that RealTimeProof's core imaging technologies may also further enhance KPG's color imaging expertise for current and future Graphics products. As contemplated by the Letter of Intent, RealTimeImage's Graphic Arts employees, led by Yehuda Messinger (RTI's Exec VP of Graphic Arts Division) and including R&D, sales and technical support staff, will become a part of KPG, continuing to provide service and support to the thousands of RealTimeProof customers and users around the world. KPG will acquire the five current RealTimeProof products: RealTimeProof ASP (Application Service Provider), RealTimeProof Express, RealTimeProof Private Label, RealTimeProof Partner, and RealTimeProof Classic (See addendum for product details). "We knew when we first developed and marketed RealTimeProof solutions that it would have a major positive impact for the graphics arts industry. Now with many of the key industry players worldwide successfully using RealTimeProof, we've come to the brink of mass adoption, and therefore it's the perfect time and opportunity for a company of KPG's stature to take these solutions to meet the widening market demand," said Zvi Eintracht, Chief Executive Officer, RealTimeImage. "We believe that combining RealTimeProof products with KPG's portfolio will give our customers access to the best opportunities for monitor proofing." Moving forward RealTimeImage will focus on its fast growing healthcare imaging business under Eintracht's leadership. RTI and KPG will work closely together to ensure the transition is seamless for customers. "With completion of the acquisition, KPG will offer an even broader range of proofing solutions from the Kodak Approval Digital Halftone Proofing systems to Kodak Polychrome Graphics Matchprint Digital Halftone and Inkjet Proofing systems to a complete selection of KPG monitor proofing options," said Jacobson. "Customers can choose leading products from analog to the latest digital offerings." The transaction is expected to close by the end of February. Acquisition terms will not be disclosed. ===== Analysis by John Zarwan: KPG’s acquisition of RealTimeImage (RTI) continues a string of excellent strategic acquisitions made by CEO Jeff Jacobson and his team. RTI was an early leader in remote proofing, and its technology has been adopted by a number of companies. RTI, while successful in the medical area, needed some additional deep pockets to be able to continue and reach the critical mass required for to be a major player in the printing industry. EFI, for example, with its acquisition of Best and other companies continues to be an increasingly formidable competitor in the prepress arena. The fit with KPG, which already can draw on the color management technologies of both Kodak and (the former) Imation, is particularly strong. It offers a great opportunity to build on their innovative Matchprint Virtual Proofing system. Remote proofing is an up and coming technology, with increasing rates of adoption. It will be increasingly important to have state of the art capabilities for any company that wants to provide a range of products and services to printers. The RTI acquisition, if effectively integrated, fits nicely into the KPG strategy and product portfolio. -- John Zarwan is a well known and respected industry analyst. He is currently an independent management consultant and contributing editor for WhatTheyThink.com. He can be reached by calling 902-892-7272 or by email - [email protected].