Eastman Kodak Co. said Thursday it has agreed to sell its gelatin business as the struggling photography pioneer looks to boost its dwindling cash reserves.
Kodak is selling the Eastman Gelatine business to Rousselot, a division of the Vion Food Group. Terms were not disclosed. Eastman Gelatine produces gelatin used in photographic and printing processes as well as in food, pharmaceuticals.
Kodak expects the sale to close within the next 30 days. About 95 Eastman Gelatine employees will transfer to Rousselot, and Rousselot will also gain a 575,000-square-foot production facility in Peabody, Mass.
Kodak has been hurt in recent years by foreign competition and the widespread popularity of digital photography. With its cash reserves shrinking, Kodak warned last month it could run out of cash in a year if it doesn't raise new financing or sell assets. The company has been trying to sell a group of 1,100 digital imaging patents, and analysts believe Kodak could raise $2 billion to $3 billion through licensing deals.
Kodak is also suing Apple Inc. and Research in Motion Ltd., saying their smartphone camera features infringe on image-preview technology Kodak patented in 2001. The company is also focusing on sales of commercial and consumer inkjet printers, workflow software, and packaging.
Kodak's cash reserves shrank 10 percent to $862 million in the third quarter. In November, it set a year-end cash target of $1.3 billion to $1.4 billion that excludes any intellectual-property licensing deals, down from a previous forecast of $1.6 billion to $1.7 billion.
The Rochester, N.Y., company also announced that Laura Quatela will become co-president on Jan. 1. She will work with Philip Faraci, who has been president since September 2007. Quatela, 54, is currently Kodak's general counsel. She will be replaced by Patrick Sheller, the company's deputy general counsel, corporate secretary, and chief compliance officer.
In after-hours trading, Kodak shares jumped 7 cents, or 11.8 percent, to 70 cents. The stock is down 88.3 percent in 2011.