Eastman Kodak, the bankrupt inventor of the hand-held camera, has agreed to sell its online photo services business to Shutterfly for $23.8 million, kicking off the bankrupt photography pioneer's relaunch as a much slimmer company.
The once-iconic company has said it will quit the camera business and is expected to fetch $1 billion to $2 billion from the sale of about 1,100 digital patents, which is due to get under way by June 30th.
Kodak said the deal with Shutterfly followed a "stalking horse" bid - a starting bid or minimally accepted offer that other bidders must surpass in a court-supervised auction - from the web-based personal publishing service.
Shutterfly shares rose 18 per cent to $31.70 in extended trade, following the news. The stock had closed at $26.91 yesterday on the Nasdaq.
Shutterfly said it will transfer Kodak Gallery customer accounts and images in the United States and Canada to Shutterfly, and will allow customers to opt out of the transition if they do not want their photos to be transferred.
Kodak Gallery - which enables users to store and share their own images and create custom printed photobooks, cards and albums - has more than 75 million users.
Kodak is focusing its consumer business on retail and destination photo solutions as well as home printing products, Pradeep Jotwani, president, consumer businesses and chief marketing officer of Kodak, said in a statement.
Shutterfly, which has millions of customers, bought privately held card design company Tiny Prints in a $333 million cash-and-stock deal last year.
It competes primarily with services such as Hewlett Packard's Snapfish, Kodak's EasyShare Gallery and American Greetings' Photoworks and Webshots brands.
Bloomberg
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