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Kodak Sells Patent Portfolio to Apple and Google’s Consortium

Kodak Headquarters in Rochester, New York | Wikipedia

Kodak Headquarters in Rochester, New York | Wikipedia

Last Wednesday, Kodak announced that they have sold their collection of digital imaging patents for $525 million. Their patent portfolio was sold to two groups of licensees separated by Apple and Google.

Intellectual Ventures and RPX Corporation organized a total of 12 intellectual property licensees, which includes Apple and Google. Based on the terms of agreement, each licensee will receive rights with respect to Kodak’s digital imaging patent portfolio and other IPs.

Apple and Microsoft backed the Intellectual Ventures bid, while RPX Corporation had the support of Google, LG, and HTC. Other licensees included during the final deal are Samsung, Facebook, Adobe and Amazon.

Kodak: Trying to Emerge from Bankruptcy

The deal is one of the key measures in Kodak’s restructuring campaign, as the company tries to emerge from Chapter 11 bankruptcy. The erstwhile photography monolith now expects to become successful with their endeavor in the first half of 2013. As stated by Kodak CEO Antonio Perez:

This monetization of patents is another major milestone toward successful emergence. Our progress has accelerated over the past several weeks as we prepare to emerge as strong, sustainable company. This proposed transaction enables Kodak to repay a substantial amount of our initial DIP loan, satisfy a key condition for our new financing facility, and position our Commercial Imaging business for further growth and success.

Kodak’s $793 million loan package required them to accumulate at least $500 million for its patent portfolio. With Apple and Google showing interest on Kodak’s patent portfolio, the imaging monolith is confident that they will be able to reach the minimum requirement.

In addition, the company was granted an extension last fall to work out a deal that would meet those terms. That is after they had trouble finalizing their deals with a number of hopeful buyers.

Due to this, the photography company got ample time to work on the financing offer from JP Morgan Chase & Co., UBS, GSO Capital Partners, and Centerbridge Partners. Plus, they were able to retain exclusive control over their bankruptcy case.

The final sale price of Kodak’s patent portfolio is much lower than the initially expected $2.6 billion selling price. Moreover, initial bids were said to be worth less than $200 million. In relation to this, Kodak plans to emerge from bankruptcy with a new look, which will limit its presence in the consumer business and will focus on consumer imaging instead.

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