For the past 2-3 years all were waiting for the Agfa shoe to drop. Reports were abounding. At various times the parent, Agfa-Gevaert, seemed on the verge of selling its consumer imaging group. Then they were not. Then they were—again.
It was certainly an uneasy time for the Agfa employees as they never knew who would be signing their next paycheck—or if there would even be one. Likewise the dealer organization, especially the independents, who were concerned about the one firm that seemed to care about their livelihood—to say nothing of the continuing flow of replacement parts. They had to be mindful of the precipitous disappearance of Gretag.Jerry Lansky
It doesn't take much imagination to hear the whisper of a competitive salesperson dropping a few chosen words about the rumors of an Agfa demise when fighting for a new lab sale. Agfa's past successes did little to protect its future. Its future was in play. Its parent firm, Agfa-Gevaert, was feeling the drag of its losing Agfa consumer division to its thriving business in graphics and health care.
It wanted out.
Then, in May, the word filtered out that a deal had been made that would preserve Agfa. Formal details were announced in mid-August when a definitive agreement was reached for a management buyout of Agfa [Consumer Imaging] for about $215 million. The deal closed on November 1st.
On that date AgfaPhoto GmbH was born. The major stockholder with 55% ownership is NannO Beteiligsholding GmbH. Two Boston venture capital firms own 10% each and eight members of Agfa management own 25%. For the most part, existing top management will remain in place with Eddy Rottie, who headed Consumer Imaging, chairing the new AgfaPhoto management group. Dr. Hartmut Emans is managing director of NannO.
A series of subsidiaries have been set up in various countries. For the U.S., the new Agfa operation has been formally named AgfaPhoto USA, Corp. Similar operations have been formalized in Canada and Mexico to serve the North American marketplaces.
Bing Liem has been president of Agfa on these shores and will continue in that role.
According to Bing, AgfaPhoto has taken over all of the products of the previous consumer products division. These include:
- Consumer Products: film, single-use cameras and digital media (a new product that will be supplied by others with the AgfaPhoto label.);
- Finishing: color and black & white papers and chemicals;
- Lab equipment: minilabs and wholesale lab equipment.
What's In a Name?
The Agfa brand name and logo have been permanently secured by AgfaPhoto. According to Bing, the Agfa brand will continue to be used on film products while all other products will adopt the AgfaPhoto label.
For the most part, nothing is changing in the North American operations for Agfa, according to Bing. The same team of about 140 people (about 2,870 internationally) will continue with the same responsibilities working from the same desks and answering the same telephones as before. During an administrative transition period customers may catch a notation on their invoices indicating that it is from Agfa Corp. on behalf of AgfaPhoto.
The major advantages to the new setup, as Bing sees it, is that the new operation will be a lot more flexible in making decisions on its own behalf and able to focus solely on the imaging business. As the smallest player in the old Agfa family, and a money loser at that, it was difficult to get the board to approve new programs—especially if they cost money.
At a presentation made at photokina last month, Dr. Emans said, "AgfaPhoto will have an extremely solid opening balance sheet…" He noted that they would be out from under about $25 million in corporate overhead that the Consumer Imaging division previously had to bear. He also noted, "We are open to expansion of our product range…we already have an eye on various possible options for expanding…"
According to Bing, the comments about the new AgfaPhoto at the show were affirmative. "Everyone viewed the change as positive. We didn't even receive a single 'neutral' comment. It was all positive."
With the corporate pieces in place and the AgfaPhoto folks looking ahead, rather than over their shoulders, they can focus on the challenge they have before them. It hasn't changed: