Friday, November 20, 2009

Maybe KBA will take a nibble at Kodak?

KBA eyes new business lines as rival manufacturers post losses
William Mitting,, 20 November 2009

Press manufacturer KBA is to move into solar energy and water treatment technology as it seeks to diversify, rather than 'enter a merger in a shrinking market'.

Speaking after the company said that it would explore 'new fields of operation', chief executive Helge Hansen said that, while print manufacturing would remain core, the company would explore acquisitions in 'new business lines with good prospects for growth and earnings'.

He identified these sectors as packaging, digital print, water treatment and solar thermal technology."

It's pretty clear that something has to give at Kodak. The transition from the film business to another business has been brutal. They've made a great run and have created some great pockets of value. But the money has pretty much run out. The Kodak Gallery is a jewel. Gezillions of users have stored their high res photos. It should have a very long tail. The Kodak moment is still the sustainable margin deliverable.

Meanwhile the Creo Scitex piece is a jewel in it's own right. I assume, but don't know, that Creo gives Kodak a strong lead in the offset workflow. Scitex dna gives them deep expertise and knowledge in inkjet. Sooner or later Stream will come to market. But what could have been a first mover advantage is gone.

This week Kodak's market cap was $1.1 billion dollars. That is less than the cost plus assumption of debt that Canon is offering for Oce. It's less than Ricoh paid for Ikon. Meanwhile, Kodak owns KKR $700 million dollars. I just can't see KKR waiting patiently for a return.

This week had a big surprise with the Canon offer. The following weeks promise to be interesting as the inevitable reorganization of the global print industry continues.

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