Tuesday, November 08, 2011

Kodak Sells its CCD Business to Platinum Equity

Business Wire: Kodak announced today that it has completed the sale of its Image Sensor Solutions (ISS) business to Platinum Equity. The financial details were not disclosed. This sale is aligned with the company's strategy to generate cash to complete the its operations. Included in the sale is a 263,000 square foot facility in Eastman Business Park in Rochester, N.Y., that houses manufacturing and research facilities.

Platinum Equity is a global M&A&O firm specializing in the merger, acquisition and operation of companies that provide services and solutions to customers in a broad range of business markets. Platinum Equity focuses on acquiring businesses that can benefit from the firm’s extensive in-house capability and expertise in transition, integration and operations.

The ISS business has a strong management team with the right vision for leading the company into the future. We share their commitment to product development and customer service and are committed to helping the business realize its full potential,” said Brian Wall, the partner at Platinum Equity who led the team pursuing the acquisition. Wall said Platinum Equity’s experience managing complex transitions from corporate parent companies will benefit employees, customers and other partners.

Thanks to KB for sending me the news!

Update: Rochester Democrat and Chronicle tells that "the 200 people employed in Kodak's CCD business all are being offered jobs with Platinum."
British Journal of Photography writes "While the financials of the transaction have not been disclosed, Reuters and The Wall Street Journal estimate that the sale brought no more than $200m to Kodak." - thanks to DG for the reference.

23 comments:

  1. Why would anyone buy a dying business? What can Platinum Equity get out of this deal - selling the unit to some large integrator? Any idea how much $ Kodak got for the unit?

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  2. "Reuters and The Wall Street Journal estimate that the sale brought no more than $200m to Kodak." from www.bjp-online.com.

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  3. Hopefully Platinum Equity will now refresh the management team. Something that Kodak should have done after the CMOS sensor fiasco.

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    1. you are right. how do you know so much about it? I lived through the fiasco

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  4. What a sad day for America. Kodak, a name synonymous with photography, just gave up on photography. It's no surprise, but sad nonetheless. It feels like we are a rudderless nation.

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  5. Read the professional busainess journals. For 40 years, they pushed the idea that business should be run for financial results. B-schools, big consulting companies and investors went along with this. Now, everyone is saying - hmmmm.... maybe that wasn't such a hot idea.

    Kodak is just the latest victim of this short-sighted business philosophy.

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  6. What a shame... May be this is better for Kodak ISS, instead of remaining attached to the big Kodak Titanic company.. It may sink very quickly now, all good assets are to be sold to remain afloat.
    I think Kodak management is a failure... from top to down managers, the contrary to Apple company.
    I like the sentence :
    “The ISS business has..." It looks a computer generated standard sentence, or from a book, lacking imagination...

    I hope Kodak ISS under Platinum Equity to get better, but they should renew all their managers first and quickly.
    What's going to be the name of the new company ?
    Anyway good luck

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  7. I think they will do well as a separate company.
    The medical imaging world is still dominated by CCD based cameras.

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  8. Mr. Walls comment: 'ISS has a strong management team with the right vision....." sounds like he has not peeled back the onion to find the reality of missed opportunities and lack of leadership.

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  9. I think Kodak's management knew their core business: how to make and sell chemically coated plastic and paper. The fact that the coated materials were used by the photography industry seems incidental.

    That said, some groups certainly did and are doing a lot of highly respectable work in digital imaging. It just wasn't a coating, so management didn't know how to leverage it.

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  10. CCD business is died. Everyone is switched to CMOS now.

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  11. This sounds like another Qimonda, unfortunately.

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  12. Platinum Equity would be well served to flush the senior management of this business. The lack of vision (no pun intended) and more importantly leadership is a shame for the good people that work their.

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  13. why someone think so "CCD business is died. Everyone is switched to CMOS now." :)

    And why we must to trust them - 40db SNR ununiform pixels against 60-80db+ and uniform pixels and RAD hardened by technology :)

    CMOS cheap but noisy, but who counts on consumer market for nonqualitive products now.

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  14. you are wrong. The performance merits for consumer and professional sensors are the same, but the consumer market gives tremendous financial asset for technology development. CCD is refuged in some very nich market and can not have the equivalent money, ressources to go faster. You can easily calculate the ratio between the investment in CCD and CMOS to understand this. CCD and CMOS are both based on silicon material and processing methods, there is no fundamental difference.

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  15. Kodak dominates the scientific and astrononomy businesses with their large format CCDs. It is a small market though. They are stuck with 6" wafers due to a need for making large format sensors larger than can be made with a stepper unless stitched reticles are used. The low volumes of the various large format CCDs they make render the high cost of stitched reticle masks infeasible for the price points at which they are sold.

    The fab gear they have to use for 150mm wafers is old and antiquated and spares are either hard to find or must be custom built. It is a difficult problem all the way around when you sell maybe 1000 high end sensors per year for each product SKU.

    the KAF16803 is very popular in amateur astronomy, and there's nothing available elsewhere that works as well for anything approaching that price. It has over 65% QE and 100K well capacity with 9x9 micron pixels and at a $4000 price point.

    The KAF09000 is popular in mammography and has simlar specs but with 12x12 micron pixels and 120ke- well capacity. It has terrible RBI though making it challenging to use for long exposure imaging such as astronomy.

    I expect a reduction in the product SKU offerings and a price increase under the new ownership.

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  16. This business could never compete against the likes of Sony and Panasonic. Evidence is the lack of any Kodak CCD in the DSLR space. Try as they may, Sony and others proved to be much better suppliers. Kodak is forced into niche markets where the competition have decided to not participate because of the market size. CMOS sensor makers see these niche markets as viable opportunities and will be the demise of this CCD business as CMOS performance continues to increase.

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  17. Kodak does participate in the high end DSLR space; the Hasselblad 39mpixel camera and digital backs are examples. But definitely not in any mass market spaces.

    Due to photolithography issues associated with fabricating large chips, they are stuck using projection printers and those are not available for wafers larger than 150mm: cannot use the more cost effective 200 and 300mm wafers because they cannot afford to make stitched reticles for low volume products: they'd simply be too expensive.

    so it appears that running 150mm wafers on 1980s-vintage fab gear keeps them from participating in the mass market products. They cannot be cost-competitive.

    Do they use foundries for smaller die or do they use their own antiquated fabs for all products?

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  18. CMOS imagers have terrible RBI too

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  19. "This business could never compete against the likes of Sony and Panasonic. Evidence is the lack of any Kodak CCD in the DSLR space...."

    Leica M9 and S2. not DSLR, however VERY popular full frame hand held camera and medium format professional camera, 6K+ and 28K+ each though.

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  20. The issue is the available niche market for this CCD business and the attractiveness of this market to CMOS sensor suppliers. No one would consider the professional cameras mentioned as a mass market.

    While the CCD competitors have decided to not play here, CMOS suppliers see these niches as a growth opportunity.

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  21. OptoIQ has an article on Kodak CCD business. Some facts are wrong, but a history of CCD sales is nicely compiled:

    http://www.optoiq.com/blogs/opto-insider-blog/2011/11/kodak-exits-opto-and-ends-an-era.html

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  22. Kodak selling Image Sensor Solutions is nothing but a blessing for the folks that work there. It has built it self up to a very profitable business and Kodak was just sucking all of the profits out with very little capital put back in the business. The new owners are much smarter and have the horse power to invest in new equipment,marketing,sales,research ex.. positioning them to continue to provide the highest quility CCDS in the world. Thanks Antonio for providing us a life boat.

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