Montagu’s $390 Million Acquisition of Flexographic Packaging Division


UBS Investment Bank acted as exclusive financial advisor and Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to Kodak for the transaction. Ernst & Young acted as financial advisor, Bain & Co. acted as commercial advisor and Linklaters LLP acted as legal advisor to Montagu for the transaction.

Eastman Kodak Company has entered into a definitive agreement to sell its Flexographic Packaging Division to Montagu Private Equity LLP, a leading private equity firm. After closing, the business will operate as a new standalone company which will develop, manufacture and sell flexographic products, including the flagship KODAK FLEXCEL NX System, to the packaging print segment.

Under its new ownership, the business will have the same organizational structure, management team and growth culture that has served Kodak’s Flexographic Packaging Division well in recent years. Chris Payne, who has served as President of the Flexographic Packaging Division for the last three years, will lead the new company as CEO.

Kodak’s Flexographic Packaging Division is an excellent example of Kodak incubating and bringing disruptive innovation to the marketplace. Over the past five years, the Flexographic Packaging business has grown and thrived within Kodak and has become a significant player in the packaging print industry. The business will be well-positioned to continue delivering solutions to maintain profitable growth for printers in the packaging sector and remain at the leading edge of flexographic print production.

Kodak expects to receive total value of up to $390 million, comprised of the following components: (1) base purchase price of $340 million, subject to purchase price adjustments; (2) potential earn-out payments of up to $35 million over the period through 2020 based on achievement by the business of agreed-upon performance metrics; and (3) $15 million payable by Montagu to Kodak at the closing as a prepayment for various services and products to be provided by Kodak to the business post-closing pursuant to commercial agreements, subject to completion of certain pledge and collateral arrangements.

The net proceeds from the transaction will be used by Kodak to reduce outstanding term debt. The Company expects that the remaining outstanding term debt will be refinanced and/or repaid using cash proceeds from additional asset monetizations.

Akin Gump Advises Kodak with a team including Dan Fisher (Picture) and Iain Wood and counsel Nicholas Houpt; intellectual property senior counsel Peter Emmi; corporate partners Frederick Lee and Zachary Wittenberg; counsels Evan Goodman, and Claire Joyce, and associates Meagan Lee Lanier, William Pelak, Doug Badini, John Sager, Sarah Withers and Penelope Shumway; international trade partner Wynn Segall and senior counsel Nicole D’Avanzo; labor and employment partner Lauren Leyden, counsel Desireé Busching and associate Grace O’Donnell; tax partner Howard Jacobson and counsel Brandon Morris; employee benefits senior counsel Aimee Adler and associate Aaron Farovitch; environment and natural resources practice group leader David Quigley and senior counsel Andrew Oelz; real estate partner John Allen Bain; antitrust partners Paul Hewitt and Corey Roush, senior practice attorney Stacy Kobrick and associate Matthew Schmitten; and cybersecurity, privacy and data protection co-practice leaders Michelle Reed and Natasha Kohne and associate Michael Miller.

Involved fees earner: Aimee Adler – Akin Gump; Douglas Badini – Akin Gump; John Bain – Akin Gump; Desiree Busching – Akin Gump; Nicole D’Avanzo – Akin Gump; Peter Emmi – Akin Gump; Aaron Farovitch – Akin Gump; Daniel Fisher – Akin Gump; Evan Goodman – Akin Gump; Paul Hewitt – Akin Gump; Nicholas Houpt – Akin Gump; Howard Jacobson – Akin Gump; Clare Joyce – Akin Gump; Stacy Kobrick – Akin Gump; Natasha Kohne – Akin Gump; Meagan Lee Lanier – Akin Gump; Lauren Helen Leyden – Akin Gump; Michael Miller – Akin Gump; Brandon Morris – Akin Gump; Grace Margaret O’Donnell – Akin Gump; Andrew Oelz – Akin Gump; William Pelak – Akin Gump; David Quigley – Akin Gump; Michelle Reed – Akin Gump; Corey Roush – Akin Gump; John Sager – Akin Gump; J. Matthew Schmitten – Akin Gump; Wynn Segall – Akin Gump; Frederick Taehoon Lee – Akin Gump; Sarah Withers – Akin Gump; Zachary Wittenberg – Akin Gump; Iain Wood – Akin Gump;

Law Firms: Akin Gump;

Clients: Eastman Kodak Co;

Author: Ambrogio Visconti