March 12, 2022 — M&T Bank CEO Rene Jones is widely rumored to be considering a not-so-hostile acquisition of Rochester’s legendary Eastman Kodak Company, in a plan that would take the firm private in order to insulate it from the pressures of quarterly earnings targets. Such a deal could give the firm time to be aggressively repositioned and postured for multi-sector growth without the distractions of quarterly earnings expectations.
Jones is believed to disagree with the strategy being pursued by Kodak CEO Jim Continenza, which has been to streamline the firm’s businesses and focus it on what he believes to be Kodak’s core competencies: industrial print and packaging. He even canceled a project to launch a line of smartphones, which Kodak had been prototyping. While the firm books just over $1 billion in annual revenue, its operating loss this year was more than $544 million, and the firm’s market capitalization (as of the close of business on March 11th) is barely $350 million.
In terms of price, Eastman Kodak would be one of M&T’s lesser acquisitions. But in terms of corporate aspirations, it could be a key inflection point in the firm’s evolution into what one observer calls “a fully-fledged industrial conglomerate”, merely part of which is finance. Those familiar with his thinking explain that the corporate model is prevalent in Japan — with financial institutions like Mitsubishi and Sumitomo, which have taken controlling positions in industrial, automotive, energy, and infrastructure companies.
As it is being currently contemplated, M&T Bank would acquire the entirety of Kodak at $4.50 a share and would take it private as immediately as is practicable. Meanwhile, M&T would install a new Board and executive team. Softbank Capital‘s Jordan Levy, the prolific Buffalo-based venture capitalist and tech executive, is being discussed to lead the turnaround as Chairman and CEO of Eastman Kodak Holdings, an investment vehicle that would be set up by the M&T Bank Corporation to accommodate the acquisition.
While Jones wants to aggressively grow Kodak’s industrial print and packaging businesses — and is even willing to keep Continenza on as the President of the firm’s print and packaging divisions — he sees the firm more broadly as an optics and technology company, and wants to reposition it as such across various industries.
Jones sees the firm as having industrial applications in defense contracting, pharmaceutical manufacturing, infrastructure systems, software, electronics, and consumer appliances.