Kodak Decides to Keep Prosper Inkjet Business, After All

After more than a year of public statements that Kodak’s Enterprise Inkjet division was for sale, the company has decided to keep it. According to the press release there was "strong interest" and they had "multiple offers" but Kodak concluded that these “did not reflect the value of the business.” And so they will keep it and reclassify it under continuing operations (it had been switched to "discontinued"). Randy Vandagriff has been named the new president of the Enterprise Inkjet Division. Phil Cullimore, the previous division head, is leaving Kodak.

Last May in the months after Kodak’s decision to sell the division I wrote:

Kodak Chief Executive Officer Jeffrey Clarke suggested that a company with a larger sales and distribution footprint in digital printing markets would be better suited to help Prosper achieve its economic potential.

Now the decision is being positioned as a “pragmatic decision” based on improvements in the business (balanced with the scale of the offers received). In other words, no one came up with a good enough offer. Clarke said that the Prosper group performed well in 2016 with a 40% increase in annuity sales and that expectations were high for this year. He’s also optimistic about the division’s next-generation UltraStream technology, which he expects will go to market in 2019.

In related UltraStream news, Kodak said that it will begin delivering evaluation kits to a total of 17 companies, including Fuji Kikai, Goss China, Matti, Mitsubishi Heavy Industries Printing & Packaging Machinery, and Uteco. The companies will use the kit to explore the integration of the technology into future printing solutions.

Organizationally, the company made the following moves in addition to Vandagriff’s promotion:

• Kodak has created a new division called Advanced Materials and 3D Printing Technology (AM3D), which is being led by Terry Taber. The Micro 3D Printing and Packaging division (MPPD), which includes Kodak’s Micro 3D Printing projects will operate in this division. AM3D will also include Kodak’s Intellectual Property Solutions division.
• Kodak’s Flexographic Packaging business, which was formerly part of MPPD, will now be its own dedicated division and will be led by Chris Payne.
• A year ago, many observers were puzzled by the decision to publicly announce the sale of the division. It seemed like an odd move. Why not explore these opportunities behind closed doors? Whatever the reasons were in making the news public, it didn’t turn out the way that Kodak might have hoped.

A year ago, many observers were puzzled by the decision to publicly announce the sale of the division. It seemed like an odd move. Why not explore these opportunities behind closed doors? Whatever the reasons were in making the news public, it didn’t turn out the way that Kodak might have hoped.

Last week's news is a disappointment for Kodak, but may bode well for the company moving forward. It’s hard to imagine the role that production digital print would play in a Kodak without the Enterprise Inkjet division. Such a sale, had it happened, would have isolated the NexPress/Digimaster business and raised questions about Kodak’s commitment to digital print.

There are certainly strong opportunities for Prosper, Stream, and UltraStream, particularly in an OEM model in which Kodak leverages its continuous inkjet (CIJ) technology to a wide range of partners. On top of that, there is the legacy Versamark business, which provides a comfortable revenue stream. From where I sit, the decision to keep the division within Kodak looks like the best of all options.