Kodak to Buy Verbatim for $175 Million
As part of Eastman Kodak Co.'s previously announced plan to expand into the computer floppy disk market, the film and camera giant said Wednesday that it had agreed to acquire Verbatim Corp. of Sunnyvale, Calif., for $175 million.
Rochester, N.Y.-based Kodak said that, beginning today, it will offer $7.55 for each of Verbatim’s 23.2 million outstanding shares.
The acquisition agreement, which requires approval by regulators and Verbatim shareholders, gives Kodak the option to pay $7.55 each for an additional 4 million shares held by J. Reid Anderson, Verbatim founder and chairman, and an additional 5 million shares owned by the company.
Stock Gains $1 Per Share
Verbatim is a leading manufacturer of floppy disks, the flexible squares that are inserted into computers to record and retrieve information. It has about 8.5% of the estimated $2-billion market worldwide.
Verbatim stock closed Wednesday at $6.25 a share, up $1, on the American Stock Exchange.
The company, which was founded in 1969 and went public in 1979, earned $15 million on sales of $170 million in fiscal 1984 ended June 30.
Verbatim Treasurer Steven Wade said neither company knows when the acquisition will be completed or how it will affect Verbatim’s 2,200 workers.
J. Phillip Samper, a Kodak general manager, said Verbatim will operate as a subsidiary.
Hit by slackened sales in the camera, film and light-sensitive paper markets, Kodak announced last October that it would enter the computer disk market.
One month later the company formed a division to make computer memory products such as floppy disks.