Kodak has completed the sale of its flexographic packaging division to a private equity backed company, receiving $320 million to pay back loans falling due this year.
The new business will operate as Miraclon and will continue to be managed by the same team, headed by CEO Chris Payne. “Customers will experience the same products, same people and same trusted Kodak product brand that they have come to depend upon to support their own business growth,” he says in a statement last week.
This will include branding of the product portfolio, which retain the Kodak name for products like the Flexcel NX high resolution plate. The Miraclon name has been derived from shunting together miraculous and clone. It will have 300 employees and revenues of more than €100 million.
The sale will give the new business greater freedom to “push the boundaries of packaging printing”, according to Payne. “Our journey has just begun.”
The company kicks off with offices in six locations, including the European centre near Brussels, two manufacturing operations and R&D units in Vancouver, Minnesota and Israel. The Weatherfield plant has benefitted from a $15 million investment to produce the Flexcel and new Flexcel Ultra plates.
Miraclon is registered as a Belgian company and is owned by Montagu Private Equity. It has paid $340 million which after compensating for losses means a payout of $320 million to Kodak. Further payments may become due according to future performance.
Speaking at the end of last year, Payne says that Montagu approached Kodak after the division was put up for sale midway through 2018. “They found us,” says Payne. “They want to invest in products and companies producing products that would be badly missed if the business did not otherwise exist.
“The business they are buying is very healthy. Customer and employee reaction to the news has been really good.”
As well as the Flexcel plate products, the new company will sell the imaging unit needed, produced by Kodak, and will also sell Approval and its related consumables, either directly or through distributors to around 70 countries worldwide.
Montagu will provide the resources to extend distribution into more countries in order to exploit the rapid growth in flexible packaging. Growth in the number of Skus, brand extensions and own brand retail products, the scope for mid web technology to achieve shorter runs and the urbanisation of populations in Asia are all drivers for flexible packaging, says Payne. “This is transforming flexo as packaging printers are looking for greater quality and greater production efficiency. The market is growing and we are only at the start of the journey.”
A report on the flexo plate market produced by Energias Market Research predicts a CAGR of 7.8% until 2024, valuing the market at $1.6 billion by that time. It was valued at $945 million in 2017.
By Gareth Ward
Miraclon takes possession of the Brussels FlexoHub that was opened as a showcase of Kodak's flexo technology less than two years ago. It was opened with optimism based on the Flexcel plate and this continues under the ownership of the new company.