Brother Industries Signs Agreement To Purchase The Document Imaging Business Of Eastman Kodak
By: Reporting Company
April 15th, 2013
Industry News
NAGOYA, Japan, April 15, 2013 /PRNewswire/ – Brother Industries, Ltd. (“Brother” or the “Company”) today announced that it has entered into an agreement with Eastman Kodak Company (“Kodak”) to acquire certain assets of Kodak’s Document Imaging business (“DI”). The agreement is the initial stalking horse bid under Section 363 of the U.S. Bankruptcy Code, to be followed by an orderly auction process under certain procedures set forth in the agreement.1 Under the agreement, Brother would acquire these assets for approximately USD 210 million in cash subject to certain price adjustments, plus the assumption of specified liabilities. Brother will assume the specified assets and liabilities of DI, which include approximately USD 67 million2 deferred revenue liabilities associated with customer prepayments. If Brother is selected as the successful bidder at the auction, or if no qualified competing bids are timely submitted, and subject to court and other regulatory approvals, the Company expects to complete the acquisition in the third quarter of 2013.
“We believe that Kodak Document Imaging is an asset that will help to strengthen Brother’s global position in document imaging solutions and enable us to provide an enhanced product and service offering to an expanded universe of customers,” said Toshikazu Koike, Representative Director and President of Brother Industries, Ltd. “Kodak Document Imaging has a long history of innovation in the scanning and document field and is a natural fit for Brother.”
Rationale for the transaction
With global sales, Kodak’s Document Imaging business is a complement to Brother’s existing lineup which includes Brother Multi-Function Center® all-in-ones and Brother ImageCenter™ scanners. Brother will acquire those assets and personnel required for the continued operation of DI. This addition, which includes Document Scanners, Image Capture Software and Technical Services, will allow Brother to offer a more robust portfolio of document scanning hardware, services and solutions to small, medium and large businesses, positioning the Company to take full advantage of the evolving office solution marketplace.
Brother is being advised by UBS Investment Bank as its financial advisors and Baker Botts L.L.P. as its legal counsel.
Acquisition Process and Timeline
Kodak and its U.S. subsidiaries filed for reorganization under chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York on January 19, 2012. Kodak’s non-U.S. subsidiaries are not in bankruptcy. The transaction requires approval from U.S. bankruptcy court and is subject to a competitive bidding process under Section 363. The transaction is also subject to regulatory approvals and other customary closing conditions.
About Brother
Founded in 1908, Brother has become a leading global manufacturer of laser printers, label printers, Multi-Function Center®, fax machines, P-touch electronic labelers, typewriters and sewing machines. Brother manufactures innovative, reliable and practical products for home and office use, while maintaining high customer satisfaction and following comprehensive measures for environmental conservation. For more information visit www.brother.com.
1 Under Section 363, the Court supervises an orderly auction process during which any other potential bidders may submit a bid. After the specified period is closed the Court approves the winning bid.
2 As of December 2012
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