Kodak Alaris - sold

[Arcadia4]

News that uk pension protection fund has sold Kodak Alaris to LA based Kingswood Capital

Kodak Alaris Announces Acquisition by Kingswood Capital Management

Kodak Alaris announced today that Kingswood Capital Management, LP ("Kingswood") has acquired the company from the United Kingdom Pension Protection Fund (“P...

www.businesswire.com

 

[WhereSs]

Why does this make me feel strangely pessimistic? Will they make the prices go extra up? Thank god for Harman.

 

[Chan Tran]

Why does this make me feel strangely pessimistic? Will they make the prices go extra up? Thank god for Harman.

Me too but Harman doesn't make color film which I use.

 

[Prest_400]

Interesting, I also share the sentiment of uncertainty as they are Venture capital.

Me too but Harman doesn't make color film which I use.

But then count that Harman was also purchased by Pemberstone Ventures, which is of a familiar nature.


Regarding film, IIRC Alaris hold the rights but does not manufacture (EK). Chemistry and Paper went into Sino promise and unfortunately we see how that went.

Idealistic, but it would be best for film to just get that reabsorbed into Eastman Kodak Advanced Materials & Chemicals.
While writing this I had to check, and the new B&W, C41 and E6 (WIP) chemicals seem directly licensed from EK (through Cinestill and Photosystems as Manufacturer). My point is that if Alaris went belly up as worst case scenario, EK could start manufacturing Still film again.

 

[pentaxuser]

Me too but Harman doesn't make color film which I use.

Phoenix? It might not be what you want to use right now but presumably Harman will not be content to settle for Phoenix as it is currently

pentaxuser

 

[DREW WILEY]

Being limited to Harman/Ilford would leave a terrible void in product selection, not only the loss of nearly all pro color films as Fuji continues to exit that market, but also some superb Kodak black and white films which differ from what Ilford offers. And quite a few of us still remember when rumors of an extinction event were about Ilford, not Kodak. We don't want all our eggs in one basket!

 

[MattKing]

Alaris went belly up as worst case scenario, EK could start manufacturing Still film again.

EK is already doing all the manufacturing of Still film.
What they don't have, and what Kodak Alaris does have, is the marketing and distribution infrastructure, as well as the rights to that marketing and distribution.
If Alaris goes belly up (i.e. goes bankrupt), those rights would be part of the bankrupt estate, unless there was a provision in the original ~2005 bankruptcy settlement agreement that bankruptcy triggers the vesting of those rights elsewhere.
Eastman Kodak doesn't have anything close to the resources necessary to perform the work that Kodak Alaris currently does - those resources went to Kodak Alaris as part of the ~2005 bankruptcy settlement, leaving EK a tiny fraction of what it was pre-bankruptcy.

 

[Prest_400]

EK is already doing all the manufacturing of Still film.
What they don't have, and what Kodak Alaris does have, is the marketing and distribution infrastructure, as well as the rights to that marketing and distribution.
If Alaris goes belly up (i.e. goes bankrupt), those rights would be part of the bankrupt estate, unless there was a provision in the original ~2005 bankruptcy settlement agreement that bankruptcy triggers the vesting of those rights elsewhere.
Eastman Kodak doesn't have anything close to the resources necessary to perform the work that Kodak Alaris currently does - those resources went to Kodak Alaris as part of the ~2005 bankruptcy settlement, leaving EK a tiny fraction of what it was pre-bankruptcy.

Indeed, just unfortunate wording on my side. I was thinking if in that scenario, something like the chemical rights and distribution could happen. But then it would be an actor like Cinestill picking up marketing and distribution while EK manufactures anyways.
I actually found that you wrote a post about the bankruptcy on the other thread which clarifies well this.

The obligations attached to the worldwide marketing and distribution business were sinking Eastman Kodak. With the settlement, Eastman Kodak was released from those, and in addition received 100s of millions of dollars in cash, which resulted in Eastman Kodak coming out of bankruptcy as a far smaller entity with a greatly simplified and streamlined business. Most of its still large international workforce became the responsibility of Kodak Alaris, allowing Eastman Kodak to continue.

Let's see how Kingswood Capital proceeds. As any other internet user, one can read about them https://kingswood-capital.com/about/ and the Team.
They are from LA, I'd like to draw a connection between LA (Hollywood) and Kodak with their imaging legacy; but let's better see if any (non) news appear in the upcoming months.

 

[cmacd123]

Ok after a bit of web hopping, "Kodak Professional" (the part most here are interested in) is part of the "Kodak Moments" business. that is one of the two segments transferred to Kingswood.

figures are crossed that the news will be perhaps positive, I can't imagine that the United Kingdom Pension Protection Fund (“PPF”) would have had much incentive to provide the capital that "Kodak Moments" needs to do long range orders from Eastman Kodak.

 

[mshchem]

So what's this mean? How many employees are employed by Alaris? In the USA for example are film orders actually shipped by Alaris? Or is Alaris simply telling EK what and where to ship.
My concern is that the Alaris people who actually know what's going on will be cut and distribution will be combined with some others.
????

 

[Alan Edward Klein]

Indeed, just unfortunate wording on my side. I was thinking if in that scenario, something like the chemical rights and distribution could happen. But then it would be an actor like Cinestill picking up marketing and distribution while EK manufactures anyways.
I actually found that you wrote a post about the bankruptcy on the other thread which clarifies well this.


Let's see how Kingswood Capital proceeds. As any other internet user, one can read about them https://kingswood-capital.com/about/ and the Team.
They are from LA, I'd like to draw a connection between LA (Hollywood) and Kodak with their imaging legacy; but let's better see if any (non) news appear in the upcoming months.

First thing I thought of. However, after reading their bio, they're involved with many buyouts in different industries and seem to be an energetic company with top executives willing to risk their capital. Maybe they saw film advancing and catching on again and felt they could market it better than the lethargic Alaris has done. When was the last time you saw an Alaris ad to buy film? The sleepy-headed people running it were only concerned with their pensions. Kodak film needs fresh blood to push it. I say let's think positively. Film might be in for another renaissance. People will stop asking us, "Do they still make film?"

 

[Paul Howell]

I would not worry too much about Kodak Moments. My reasoning is that in terms of film production Eastman Kodak is at capacity. Unless Kodak Moments can find and market other brands, they sell as much as Eastman Kodak makes.

 

[Alan Edward Klein]

I would not worry too much about Kodak Moments. My reasoning is that in terms of film production Eastman Kodak is at capacity. Unless Kodak Moments can find and market other brands, they sell as much as Eastman Kodak makes.

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. That would give them more flexibility in pricing film to the final consumer, bringing down prices and making them more competitive. Now that pensioners aren't involved and real business people are running it, many possibilities open up. This should be an exciting re-energized future for Kodak film for them as well as for us.

 

[BrianShaw]

What would make anyone really think that a venure capital private equity group would really care about film users or the Kodak pensioners? That kind of orgainziation exists for only one purpose - to make money for themselves, one way or the other. And history has shown that it is often "the other" way.

 

[Quiver2]

In general private equity groups exist to suck the resources from a company like a vampire leaving behind a desiccated husk behind. EK better start looking at how Harman handles distribution, and come up with a plan for the eventual dissolution of Alaris.

 

[Chan Tran]

What would make anyone really think that a venure capital private equity group would really care about film users or the Kodak pensioners? That kind of orgainziation exists for only one purpose - to make money for themselves, one way or the other. And history has shown that it is often "the other" way.

Of course a venture captial group doesn't care about anything except money. I wonder what would they do with Alaris to make money.

 

[BrianShaw]

I wonder what would they do with Alaris to make money.

For the same reason they acquire any other organization... they see a potential for some asset(s) they can exploit for profit. What that may be... like you, I don't quite know for sure right now. Often it is diffficult to know until the final blow has been delivered. In general, though, these kind of acquisitons are a death knell.

In a recent non-photographic example the capital/equity group sold the business' real estate to themselves so the business would rent-back from them. That ate up profit and operating funds that lead to insolvency but in the meantime it was a real money-making scheme for the capitalists. And before that, the capitalists converted a diversified raw product sourcing to a sole-source supplier, that they also owned, at much higher raw product costs. The money the capitalists made had nothing to do with effectively running or "saving" the core businesss or providing product to the customer. And now the business is dead and gone.

EDIT: All that written, sometimes it seems that changes like this work out in an acceptable way. Might be a different way but...

 

[brbo]

I wonder what would they do with Alaris to make money.

Keep what works and ditch everything else they don't think has a future.

If you read Kodak Alaris financial reports, Film segment has been the driver behind revenue and profit growth for many years now, so it would seem that continuing with getting cheap film from Eastman Kodak and selling it at high price to end users should be a pretty safe bet.

 

[BrianShaw]

Keep what works and ditch everything else they don't think has a future.

If you read Kodak Alaris financial reports, Film segment has been the driver behind revenue and profit growth for many years now, so it would seem that continuing with getting cheap film from Eastman Kodak and selling it at high price to end users should be a pretty safe bet.

Whatever the plan is, it is certain that they've done their homework and have a plan. These groups tend to be very shrewd and intelligent when they bet.

 

[Agulliver]

Cautiously pessimistic about this but with the caveats that the venture capital company must have some sort of plan/strategy...and the pension authority probably would have tried to block the sale if they felt there was a tangible risk.

I am mindful that there as concern when Pemberstone took on Harman, when in fact thus far that has lead only to positive outcomes.

Generally these companies work in one of two ways.....strip an acquisition of it's profitable parts and sell the rest off....or actually invest in the companies they've bought and keep them on for the medium to long term. Let's hope this is the latter. Judging by their track record, it may be.

What this means for us? Difficult to say. But we can assume they want to sell us Kodak film.

 

[DREW WILEY]

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.

 

[Paul Howell]

I think it is easy to overgeneralize, many equity firms look for long term investment. The firm that just bought Whata Burger has opened many, in area 4, new restaurants, they own the land and the building. Alaris does not have much in the way of phsucial plants, nothing that could be sold as scrap or parted out. In the end time will tell.

 

[MattKing]

Pemberstone seems to have done well with their acquisition of Harman/Ilford.
A US venture capital is bound to be more "nimble" than either the UK Pension Fund Protection entity, or for that matter, Eastman Kodak before the bankruptcy.

 

[pentaxuser]

Pemberstone seems to have done well with their acquisition of Harman/Ilford.
A US venture capital is bound to be more "nimble" than either the UK Pension Fund Protection entity, or for that matter, Eastman Kodak before the bankruptcy.

This works both ways of course. They are by the above reckoning bound to be more "nimble" when it comes to seeing the signs that the investment has started to suffer in terms of its returns and then taking more drastic action than a company with all its eggs in the one basket called film

pentaxuser

 

[Alan Edward Klein]

Of course a venture captial group doesn't care about anything except money. I wonder what would they do with Alaris to make money.

Making a business more profitable does make money for an investor. Let's remember that Venture Capital is an investment firm just like Warren Buffett's Birkshire Hathaway. Not much different than corporations floating stock on a stock market to expand their corporation except the investors in this case are experienced in making existing firms more profitable and improving their business. They also can provide needed capital for expansion. Sure there are some investments used for other purposes by crappy VC firms that might destroy the company. But that's a minority. This VC just received $1 1/2 billion in investments in a third round and has been in business since 1997. The president of the VC firm got a BA from Duke and an MBA from the Stanford University Graduate School of Business They have an excellent staff. It seem they are not a fly-by-night outfit but a very serious investment firm. Here's their portfolio:

Portfolio - Kingswood Capital Management, LP

kingswood-capital.com