NEWS FLASH - Kodak buys Creo for US$980 million

The takeover is the latest in a series for Kodak’s Graphic Communications Group (GCG), which in recent months has taken control of platemaker, Kodak PolyChrome Graphics (KPG); digital press manufacturer, NexPress; and high-speed digital imaging company, Scitex Vision. Combined with its wide format Encad division, the Creo deal makes Kodak GCG one of the largest suppliers to the graphic arts industry.

“While we are very pleased with the assets that currently comprise our Graphic Communications Group, the Creo acquisition offers us the opportunity to strengthen our position in the market,” said Antonio M. Perez, Kodak’s President and Chief Operating Officer. “As the pioneer of digital prepress systems and the leader in workflow, Creo will accelerate our effort to bring more products to market sooner, for the benefit of our customers and our shareholders.

“Creo will benefit from this transaction because Kodak brings them the size and scale necessary to increase their presence in the market,” Perez said. “Kodak will benefit because we will be able to offer end-to-end solutions with a broader suite of products from Creo, and to capitalize on the synergies this creates across GCG.”

The deal has the support of the embattled Creo management and board of directors who have now postponed the special general meeting from February 14 that was to have seen a hostile battle for control of the company. The meeting will be held in March 29 when shareholders will vote on the Kodak buyout.

“The proposed transaction will not only generate immediate return for Creo shareholders but will also benefit our customers through the combination of leading prepress equipment and consumables,” said Amos Michelson, CEO of Creo. “By uniting our strengths, Creo and Kodak can continue to actively drive the evolution of the graphic communications industry while delivering a complete line of the highest-quality, most competitive products and services in our industry. The economy of scale gained by combining resources will allow us to speed up product development and deliver new innovations and breakthrough solutions to the market.

“Kodak also stands to gain a great deal from this transaction,” continued Michelson, “including a pipeline of promising products from Creo’s leading research and development organization, direct access to the largest installed base of computer-to-plate (CTP) and workflow systems in the world, and access to our extremely loyal and supportive customer base.”

On completion of the deal Creo will be integrated into CGC, according to James Langley, president of Graphic Communications Group and Senior Vice President, Eastman Kodak Company.

“Creo’s product line complements the work already underway at Kodak. Commercial printers use Creo’s products in tandem with those sold by KPG; combining Kodak’s, KPG’s and Creo’s portfolios will give customers what they want – a single supplier for their graphic communications needs. We will be able to marry our digital presses with Creo’s prepress offerings, including their market-leading workflow, to accelerate growth,” he said

“Creo is highly respected in its industry, and its customers, especially users of its leading workflow software, are loyal to its products because printers prefer to remain with software programs once they are installed and work successfully.”

The addition of Creo foreshadows a major reorganisation in the supply side of the industry. KPG, NexPress, Encad and Creo all operate as standalone suppliers in the Australian and New Zealand graphic arts market. Duplication of activities abound, not least in the fledgling Creo plate supply business. Although too early to tell, there will surely be some consolidations in the months ahead.

Creo has more than 25,000 customers and offices in 30 countries worldwide.