Photography giant Eastman Kodak Co. said it will buy Encad Inc. for $25 million, a move that will boost profit in 2003 and places Kodak among the top three sellers of wide-format inkjet products.
San Diego-based Encad's large color printers can create designs up to 5 feet wide, and are popular for making architectural blueprints, billboards, maps and other graphic arts applications.
Encad will be paid for in either stock or cash, at Kodak's option. It will become a wholly owned subsidiary of Kodak, which is based in Rochester, N.Y.
The acquisition comes one day after Kodak announced it would realign its operations in a bid to make its units more autonomous, cut spending and boost lagging profit.
Kodak said the deal makes it one of the top three sellers of wide-format inkjet products--along with Hewlett-Packard Co. and Seiko Corp.'s Epson--a $2.4-billion output market with annual growth of about 15%.
Kodak expects the transaction to close early in 2002, pending regulatory and Encad shareholder approval.
Kodak shares rose $1.34 to close at $28.62 on the New York Stock Exchange. Encad shares were up 6 cents to $1.91 on Nasdaq.