ROCHESTER, N.Y. — ROCHESTER, N.Y. - Eastman Kodak Co., the biggest maker of film for movies, agreed to buy Laser-Pacific Media Corp., a Hollywood photography-services company, for $30.5 million to expand its digital services for the entertainment industry.
Kodak will pay $4.22 a share in stock or cash, 37 percent more than Laser-Pacific's closing price yesterday. Laser-Pacific provides editing and other post-production services for film and television and had $31.8 million in sales last year, Kodak said.
Kodak is investing in its digital, health and entertainment businesses to cope with a decline in consumer-film sales. The company's sales of traditional film fell 8 percent in the second quarter as people took more digital photos, while the other businesses increased sales by 13 percent to 14 percent, Kodak chief executive Daniel A. Carp said last month.
Last week, Kodak, also the biggest maker of X-ray film, agreed to buy PracticeWorks Inc. for $500 million to expand in the digital dental-imaging market. Standard & Poor's cut its Kodak debt rating after the acquisition was announced, saying it may hinder debt-reduction efforts.
Kodak will assume Laser-Pacific's $3.3 million debt. The filmmaker, which had $2.99 billion in debt as of June 30, expects the purchase to close in the fourth quarter and doesn't expect it to have a "material impact" on earnings.
Shares of Kodak fell 8 cents to close at $27.55 yesterday on the New York Stock Exchange. Laser-Pacific rose $1 to $4.09 on the Nasdaq stock market.
Kodak said last month that its sales to the entertainment industry last quarter were helped by an increase in new film releases and the company's new Vision 2 motion-picture film. The purchase of Laser-Pacific will expand Kodak's digital-services capabilities in the film industry and establish its presence in television post-production.
Digital-cinema technology lets studios send movies to theaters via satellite or fiber-optic cable, and can reduce film distribution-costs by eliminating the need to print, ship and store film reels.
Laser-Pacific, founded in 1990, had 226 employees at the end of 2002. In the first quarter it increased revenue by 23 percent to $9.8 million, as net income rose 67 percent to $655,733.
The company has won six Emmy awards for engineering development, Kodak said. Laser-Pacific has worked for such television shows as Viacom Inc.'s Touched by an Angel and Fox Entertainment Group Inc.'s Judging Amy, and for movies such as Viacom's Forrest Gump and Turner Broadcasting System Inc.'s Lost in Space.
Kodak had 70,000 workers at the end of last year and 2002 sales of $12.8 billion.
Its other entertainment- related businesses include Cinesite, which does visual effects and digital imaging for feature films, television and music videos, and FPC Inc., which provides digital-imaging storage and other post-production products and services to the motion-picture industry.