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Nov 15, 2001 12:00 AM
Eastman Kodak Company (Rochester, NY) announced it will acquire ENCAD, Inc. (San Diego), a manufacturer 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 reportedly $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.
"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."
"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 décor. 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. All 2001 shipments will be in Asia and Europe, with a U.S. sales launch beginning first quarter 2002.