Kodak Alaris - sold

MattKing · Aug 4, 2024

It isn't as if KA has a bunch of buildings and land or long term commitments from customers - the sorts of things asset strippers might want.
KA has experienced and knowledgeable people, relationships with local distributors, and most importantly, worldwide marketing rights for a product with an iconic name and reputation - Kodak still film.

BrianShaw · Aug 4, 2024

Unfortunately there have been enough instances of investmennt companies only going after a quick win rather than long-term profitability, and using investment loss as a strategy. Let's not forget that there is value in loss. Liquidating physical assets is only one way. Driving out legacy knowledgable and experienced people is another way. I worked for a compnay that was aquired, which had no physical assets, and after the people were driven out the company gloated about the intellectual property and contract past performance history that they "acquired". Even though they had no skin in that information, they successfully used the past experience to their advantage... for a while and then the jig was up. There are a lot of highly educated people; some make good choices and others not-so-much. I hope it is a rosey future but not going to look through rose-colored glasses until there is some indication that the sun is shining.

MattKing · Aug 4, 2024

BrianShaw said:
Unfortunately there have been enough instances of investmennt companies only going after a quick win rather tahn long-term profitability, and using investment loss as a strategy. Let's not forget that there is value in loss. There are a lot of highlu educated people; some make good choices and others not-so-much. I hope it is a rosey future but not going to look through rose-colored glasses until there is some indication that the sun is shining.

While I agree with Brian, it is my impression that the benefits coming to KA arising from investment loss that were part of the EK bankruptcy settlement have essentially been realized, and I don't think that there are substantial realizable losses remaining there.
But I'll let the accountants look at the current balance sheets - they are public - and correct me if wrong.

Alan Edward Klein · Aug 4, 2024

DREW WILEY said:
Time will tell. But "vulture capitalism" isn't as popular as it was in the 90's up to 2010's. Smart investors have become wary of it.

I think that's true about a lot of firms just starting. The Venture Capitalist hires a famous person as their spokesman, makes a splash when issuing stock, and then pockets the sale of stock profits and forgets about the firm. But this is an existing business that's been operational a long time with a proven product decades long, Kodak Film, and track record with expanding sales. Heck, others are even making film cameras again.

Maybe the VC president is a film buff.

BrianShaw · Aug 4, 2024

Private equity investors often have very different goals, objectives, and techniques than venture capital investors. It might be best to remember that this is not a venture.

BrianShaw · Aug 4, 2024

MattKing said:
While I agree with Brian, it is my impression that the benefits coming to KA arising from investment loss that were part of the EK bankruptcy settlement have essentially been realized, and I don't think that there are substantial realizable losses remaining there.
But I'll let the accountants look at the current balance sheets - they are public - and correct me if wrong.

You are correct about past losses. It is my understanding that future investments can either result in future gains or losses independent of the past. But I don't have a CPA or MBA so I miught also be incorrect.

TIME WILL TELL!

Alan Edward Klein · Aug 4, 2024

BrianShaw said:
Unfortunately there have been enough instances of investmennt companies only going after a quick win rather than long-term profitability, and using investment loss as a strategy. Let's not forget that there is value in loss. Liquidating physical assets is only one way. Driving out legacy knowledgable and experienced people is another way. I worked for a compnay that was aquired, which had no physical assets, and after the people were driven out the company gloated about the intellectual property and contract past performance history that they "acquired". Even though they had no skin in that information, they successfully used the past experience to their advantage... for a while and then the jig was up. There are a lot of highly educated people; some make good choices and others not-so-much. I hope it is a rosey future but not going to look through rose-colored glasses until there is some indication that the sun is shining.

Not sure what Alaris has that can be sold other than their exclusive rights to sell Kodak film. They have no plants or patents as far as I know. Basically, they're a distributor.

Alan Edward Klein · Aug 4, 2024

BrianShaw said:
Private equity investors often have very different goals, objectives, and techniques than venture capital investors. It might be best to remember that this is not a venture.

Yes, that's the point I was trying to make.

Alan Edward Klein · Aug 4, 2024

MattKing said:
While I agree with Brian, it is my impression that the benefits coming to KA arising from investment loss that were part of the EK bankruptcy settlement have essentially been realized, and I don't think that there are substantial realizable losses remaining there.
But I'll let the accountants look at the current balance sheets - they are public - and correct me if wrong.

Not sure if the new business has to have its financial records disclosed since it's 100% owned now by a private equity firm. It's like you and I bought out Apple, lock, stock and bottle.

BrianShaw · Aug 4, 2024

Alan Edward Klein said:
Not sure what Alaris has that can be sold other than their exclusive rights to sell Kodak film. They have no plants or patents as far as I know. Basically, they're a distributor.

Well, on Shark Tank there have been deals where the plan was not to really expand a budding business to make money, but to exploit their processes and relationships to promote a totally different product to make money. All I know is that if any of us knew how this stuff worked we'd probably be rich and living in the big house and playing golf rather than spending the day banging away on a keyboard.

Paul Howell · Aug 4, 2024

I think there is a distinction between a venture capital private equity which are looking for start ups that need up front capital then sell later for a profit. Kingswood owns a diverse set of companies, retail, dredging barges, a grocery store chain among others. Does not seem to have reputation for slash and burn investing.

MattKing · Aug 4, 2024

Alan Edward Klein said:
Not sure if the new business has to have its financial records disclosed since it's 100% owned now by a private equity firm. It's like you and I bought out Apple, lock, stock and bottle.

If it remains a UK corporation, it will have to publish its financial statements.
The US (and Canada) are outliers in the world, in that private corporations are not required to make their financial statements public.
Not so in much of the rest of the world.

Paul Howell · Aug 4, 2024

Here is a like the Kingswood website, seems like Kodak Alaris is just the right side, but Eastman Kodak would be too much of a stretch.

Firm - Kingswood Capital Management, L.P.

Kingswood partners with leading companies in the middle market that stand to benefit from our capital and extensive operating resources.

www.kingswood-capital.com

MattKing · Aug 4, 2024

MattKing said:
If it remains a UK corporation, it will have to publish its financial statements.
The US (and Canada) are outliers in the world, in that private corporations are not required to make their financial statements public.
Not so in much of the rest of the world.

And just to be clear, the rationale for the differences in approach to private corporations are complex mixtures of politics and law, and as such are not appropriate for discussion on Photrio.

MattKing · Aug 4, 2024

Paul Howell said:
Here is a like the Kingswood website, seems like Kodak Alaris is just the right side, but Eastman Kodak would be too much of a stretch.

Firm - Kingswood Capital Management, L.P.

Kingswood partners with leading companies in the middle market that stand to benefit from our capital and extensive operating resources.

www.kingswood-capital.com

Eastman Kodak is mostly a commercial printing related business - the stuff we are interested in here is an important but moderately small segment of its overall business.

BrianShaw · Aug 4, 2024

Paul Howell said:
I think there is a distinction between a venture capital private equity which are looking for start ups that need up front capital then sell later for a profit. Kingswood owns a diverse set of companies, retail, dredging barges, a grocery store chain among others. Does not seem to have reputation for slash and burn investing.

This seems a very true statement. I'm only familiar with one of their companies, as a customer, yet know that Kingswood saved them from eternal damnation they surely would have faced at the hands of their prior ownership. The press releases of the time indicated that the investment management "liked the store" so had a vested interest in its future success... which seems to be happening. Perhaps, as Alan wondered, one of their investor is a fellow film photographer.

Alan Edward Klein · Aug 4, 2024

MattKing said:
And just to be clear, the rationale for the differences in approach to private corporations are complex mixtures of politics and law, and as such are not appropriate for discussion on Photrio.

Disregarding the rationale, can you answer a couple of questions for future analysis sdo we can tell how much Kodak film is sold using ALaris reporting requirements? When American corporations buy out British companies completely, how does the corporation stay British. Doesn't Alaris die? Why is reporting over there still required?

Also, vice versus. If a British firm buys out an American corporation, doesn't it effectively belong there with no reporting in the US any longer?

Alan Edward Klein · Aug 4, 2024

MattKing said:
Eastman Kodak is mostly a commercial printing related business - the stuff we are interested in here is an important but moderately small segment of its overall business.

Eastman might be willing to sell off its film production to the well-funded VC and say good riddance. I assume that Alaris never had the money to buy it. Now that would be interesting.

Paul Howell · Aug 4, 2024

Does Eastman Kodak use the same coating line to coat products other than film? Alan Edward Klein has a good point. Now that Kodak Alaris has been sold with ownership reverting back to the U.S what if any of the bankruptcy conditions still apply? I assume that Kingswood would have figured all this out by the time they signed off and money traded hands.

MattKing · Aug 4, 2024

Paul Howell said:
Does Eastman Kodak use the same coating line to coat products other than film?

Yes - and more importantly, the same knowledge and expertise.
Their Estar "film" manufacturing line - where "film" is used to indicate the sort of non-triacetate substrate some photographic "films" are coated on - is also produced by parts of the team, and that is a growing part of their business.
As is their circuit "board" manufacturing - "board" in quotes, because many are coated on flexible materials.
They are quite expert in respect to a whole bunch of coating issues - critical for photographic film, but critical for a bunch of other things as well.
I expect that that expertise is also useful for the commercial printing support that forms the majority of EK's business.

MattKing · Aug 4, 2024

Alan Edward Klein said:
Disregarding the rationale, can you answer a couple of questions for future analysis sdo we can tell how much Kodak film is sold using ALaris reporting requirements? When American corporations buy out British companies completely, how does the corporation stay British. Doesn't Alaris die? Why is reporting over there still required?

Also, vice versus. If a British firm buys out an American corporation, doesn't it effectively belong there with no reporting in the US any longer?

The financial statements of KA don't report the amount of film sold - they report revenues, expenses, assets and liabilities.
Corporations are entities created by statute. They only exist as artificial creations - their existence is purely a creation of statute, and their powers and responsibilities and entitlements flow entirely from their statutory created structure.
Corporations can stay in existence for ever. Not so for people. And corporations can and do own things and owe things.
If someone - individual or corporate - buys a corporation's shares, they own those shares, including any rights and obligations attached to the shares. They do not own the things owned by the corporation, nor do they owe what the corporation owes, absent things like creditors insisting on additional personal guarantees from the individual shareholders.
KA is a UK corporate entity. It can never become a US corporate entity.
It could sell assets, leaving itself as a shell, but for long as the statutory maintenance requirements are maintained, it will remain in existence as a UK corporation.
If Kingswood wants to create a US corporation - or Canadian corporation, or Cayman Island corporation, or whatever country corporation - and take steps to create business relationships between that and KA, they can. The terms of KA's agreement with the current version of Eastman Kodak may or may not make that possible or practical.
Corporations are not the people who own them, or the people who work for them. Their statutory existence determines what they are, and what they aren't.

pentaxuser · Aug 4, 2024

MattKing said:
And just to be clear, the rationale for the differences in approach to private corporations are complex mixtures of politics and law, and as such are not appropriate for discussion on Photrio.

Can you expand on this? I wasn't even aware why we are on the brink of straying into this forbidden area on Photrio. It is just a discussion on gathering information about company law as it affects a U.S company buying one registered in the U.K or so I thought until I saw your reply

If we need "heading off the at the pass" as they used to say in the Westerns then in what way were we heading that way

What exactly is proscribed in the future in this thread? At least if I know then I know how to avoid straying into that area

pentaxuser

MattKing · Aug 4, 2024

American law is very different on this than UK law - and the differences are charged with issues of political philosophy - the sort of differences that cause things like revolutions!

cmacd123 · Aug 4, 2024

Alan Edward Klein said:
What if they buy Kodak film production as well? Alaris USA is already right next to the Rochester NY production plant (I believe). That could make managing both manufacturing and distribution an easier joint effort, just as Eastman Kodak did it for a century.

Eastman Kodak has exactly ONE machine that fills one very large building that does ALL the coating of every film that Kodak makes. Kodak Alaris is designed to be a marketing organization with the rights to buy Kodak Branded still film from Eastman Kodak.

cmacd123 · Aug 4, 2024

MattKing said:
If it remains a UK corporation, it will have to publish its financial statements.
The US (and Canada) are outliers in the world, in that private corporations are not required to make their financial statements public.

but is Kodak Alaris an US corporation, or a UK one? it is after all Kodak Alaris INC, not say LLC. it was originally owned by the Kodak Limited Pension plan, and when that organization asked for help from the UK pension board, that board took over the KA ownership. Like any asset that they take on, they have sold it to a (US based) Bidder. the Kodak Limited pension plan is thus no longer involved.

Kodak Alaris - sold

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