Polaroid Agrees to Be Sold for $426 Million

Polaroid Holding Co., owner of the camera brand that pioneered instant photography, said Friday that it agreed to be acquired by investment firm Petters Group Worldwide for about $426 million in cash.

Under the deal, Polaroid shareholders would receive $12.08 a share, 13% more than Friday’s closing price of $10.70 in over-the-counter trading.

Petters, which owns a company that sells Polaroid DVD players and plasma televisions, would add cameras and other products to its lineup.

In 1947, Polaroid built a camera that developed pictures in 60 seconds, and sold its first model a year later. By the late 1970s, Polaroid’s OneStep was the world’s bestselling camera and annual sales were more than $1 billion.

“We’re working with a company that already has an appreciation of the Polaroid brand,” said Polaroid spokesman Skip Colcord. “It’s an ideal strategic fit.”

Sales fell from a peak of $2.3 billion in 1994 to $752.7 million in 2003 amid increased demand for digital cameras. The company lost money for three straight quarters before filing for bankruptcy protection in October 2001.

J.P. Morgan Chase & Co.’s private equity unit, One Equity Partners, in 2002 purchased a 53% stake in Polaroid for $56 million. One Equity agreed to vote in favor of the acquisition by Petters.

Petters, owner of online auctioneer UBid.com, began licensing Polaroid’s consumer electronic products in 2002.