HARMAN technology Acquires Kentmere Photographic

Ian Grant said:

In view of the (there was a url link here which no longer exists) that's just been posted its good to have some good news.
Ian

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Perhaps if Simon has a few quid spare in his back pocket he can follow through and snap up a bargain at Rochester...
Seems to me like a good move all round. I don't imagine that Kentmere have been having an easy time of it and a merger with Ilford looks on the face of it to be a good safety net for both of them as well as all of us! Whilst Ilford are a friendly, helpful bunch, let's not forget that they are a business, so yes, they will be looking to sell their products for the maximum amount they can (wouldn't we all?) but in the current climate for me they already don't have any competition (just try buying Kentmere in Plymouth) and any rises will always be tempered by potential customer losses to the d*****l market.
The very best of luck to both companies!

Steve

Gary Holliday said:

I'm not sure what to make of this. Ilford/ Harman pi**ed me off when they halted the production of the Cooltone developer. How many Kentmere products will no longer be cost effective?

Obviously early days to answer this, but will any old Kentmere products be resurrected? The Art range of papers for example? Foma have similar products so not sure why Ilford/ Kentmere can't use a similar method?

Hopefully the acquisition will lead to increased profits.

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Have they really dropped Cooltone? This was an excellent path to cool prints on MGWT.
Mark

You know, something just occurred to me and I'm sort of suprised nobody (AFAIK) raised earlier:

Kentmere does have one thing that Ilford I suspect would like to get it hands on:

UK-based coating facilities that are owned and not leased...

Ilford has a long-term (20 year?) lease on its present facilities. Most long-term leases are tied (in some fashion) to the value of the property. Given the incredible real estate appreciation in the UK over the past few years; I can't imagine that lease is healthy for Ilford. Maybe this acquisition is Ilford's "escape plan".

I'm glad of that if it's true. But it doesn't change the fact that I'm done with Kentmere as I have a tough time believing FinePrint will still be around for much longer.

I wonder if the the knew Ilford/Kentmere is going to have a presence at the Javitz show this weekend? Ilford was one of about 8-10 people I was going to see. Most of the show is digital disposable products and companies. I don't think Kentmere was there last year. And Freestyle wasn't there either which was surprising being one of the biggest resellers at this point, seems like it would have been to their advantage.

WOW

Hi Simon,
I'm particularly interested in graded papers. Kentmere has stopped producing grades 1,3 and 4. Are there any plans afoot to either start producing them again or simply remove their graded paper and start producing Gallerie in grade 4 (he says hopefully)?

aldevo said:

Nobody should feel they know ANYTHING about the relative health of any of these companies. We'd been told for the past few years that all was well at Kentmere with their new production facility, leaner staff, etc., and a very dedicated photo-enthusiast owner.

Well if all of the above were true, why did this deal get made?

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Without wishing to pretend I know anything about this specific deal, I've been involved with more M&A activity than I would wish for, and I can assure you that not all mergers or acquisitions are driven by desperation or failure.

Sure, some are - I've seen enough of that kind. I've seen the kind though where it just makes sense for both parties. Economies of combining businesses, while always massively overstated to the stockmarket, really do exist - yes, unfortunately that often means in terms of staff (why have two HR, accounts departments,) but also (plucking things out of the air,) say, increased buying power on the silver markets, distribution channel efficiencies (that is one helluva big warehouse & shipping facility in Mobberley,) and so on.


In other words, it is entirely possible for two successful, rationally run businesses to come to the conclusion that a deal is there to be done to create one successful, rationally run business.

Dear All,

I cannot comment further at this time about any details as I am sure you realise, what I can do is point out one section in the press release 'It will continue to offer the same resin coated and fibre based monochrome papers'
I think that is a very clear statement of intent.

Simon ILFORD Photo / HARMAN technology Limited :

tim_walls said:

Without wishing to pretend I know anything about this specific deal, I've been involved with more M&A activity than I would wish for, and I can assure you that not all mergers or acquisitions are driven by desperation or failure.

Sure, some are - I've seen enough of that kind. I've seen the kind though where it just makes sense for both parties. Economies of combining businesses, while always massively overstated to the stockmarket, really do exist - yes, unfortunately that often means in terms of staff (why have two HR, accounts departments,) but also (plucking things out of the air,) say, increased buying power on the silver markets, distribution channel efficiencies (that is one helluva big warehouse & shipping facility in Mobberley,) and so on.


In other words, it is entirely possible for two successful, rationally run businesses to come to the conclusion that a deal is there to be done to create one successful, rationally run business.

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A very sound post.

My intent was more to state that small, privately-owned concerns do not need to disclose, in detail, how their operations are faring and no company really is under much of an obligation to disclose their true intent - in advance - as to how they will be servicing their customers.

But I'm still finished with Kentmere and will be using FotoImpex's MCP and MCP for my shorter-toe paper option.

Marc Leest said:

I don't like it. Here is the construction of a monopoly going on and that means UNLIMITED price increases.

-M-

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"I love the smell of rats in the morning. It smells like...
creativity! errr....money!!!"
just kidding

Bob Carnie said:

WOW

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What Bob said...

Seriously, Simon, there will be people who will wail that this is the beginning of the end, and those who will herald it as a grand beginning.
For me, I will just say that I have the greatest confidence in the Ilford products I use, and wish Harman the best of luck with this new acquisition.

I have been using Kentmere/Luminos papers for about a decade. The surfaces are wonderful, toning superb and of course, tonality. I'm thrilled to know they will continue and hopefully move from strength to strength with the additional support of Ilford behind them. One comment- my two favourites are available only as either single grade or 2&3-any chance of expanding the offerings?
Russ

I think I said earlier that this type of merger is going to take place. I believe I coined a name like Fuilfordak or some such for the emerging giant.

Yes, this move is logical, and no, Kodak is not exiting the film market which represents $1B / year income which is 50% of its income. I would guess that Ilford and Kentmere combined don't come up to that figure. (Sorry Simon, I have absolutely no idea if I am even close.)

PE

What it seems like to me, is that it shows Ilford is making enough money (profit) to be able to invest in an acquisition. This is not bad news.

Ilford "could" now have a venue to market lower-cost film (not paper) products under the Kentmere brand without diluting the market for Ilford films. Kentmere is still in the private label business, along with the Kentmere brand of papers.

aldevo said:

My intent was more to state that small, privately-owned concerns do not need to disclose, in detail, how their operations are faring and no company really is under much of an obligation to disclose their true intent - in advance - as to how they will be servicing their customers.

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True enough. Although I will say, one announcement which would give me the heebie-jeebies far more would be that Harman were going public.

The stock exchange can be a strange mistress which while enabling access to capital, and ensuring transparency, often values rather odd goals - as often as not the market will prefer a company losing money on growing revenues to one making a healthy profit on flat or falling revenues.

A business such as traditional film and paper - which, with the best will in the world, is likely to continue to decline for some time until it hopefully reaches a stable point - is one ill suited to the vagaries of the stock markets; a cheerful canter for 'diversification' just to prove to the markets that revenues will grow, at the expense of the profitable core business, can be predicted (see, for example, Kodak, or Ilford pre-MBO.) It's that attitude which is at least partially responsible for the death of manufacturing in this country - it's not that we can't make these niche industries profitable, it's that getting investment for them is impossible. Fortunately as consumers we have Eastern Europe stepping into the gap these days, it seems.


Anyway, looking on the bright side - I think we can all take some pride in the fact that so far noone has used the word 'synergy'...

...d'oh!

Harman acquires Kentmere

The news has started travelling through the dealer network that Harman Technology has taken over Kentmere, the deal having been already signed & sealed. Apparently there are no plans to change the range of products or branding of the Kentmere range. Maybe inevitable but a little sad that the last small independent manufacturer has to be swallowed (and in it's centenary year, I think).

In the spirit of the news, I've merged Martin Reed's new thread on this topic with the existing one.

Martin Reed said:

The news has started travelling through the dealer network that Harman Technology has taken over Kentmere, the deal having been already signed & sealed. Apparently there are no plans to change the range of products or branding of the Kentmere range. Maybe inevitable but a little sad that the last small independent manufacturer has to be swallowed (and in it's centenary year, I think).

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Efke and Foma are still around. They are, AFAIK, both small (Efke is fewer than 30 people - can't get much smaller than that) and remain independent.

Putting things into perspective the turnover for Kentmere was stated to be £8 million per annum.

A newspaper report in the UK, 5th October, stated that Harman had approached Kentmere witha view to buying the company. Shaun Mulvaney, the managing director, of Kentmere stated "The approach is being given very serious and careful consideration by the company," and said. "If the sale were to proceed, it is likely to take place on or around October 12."

This is what has happened. Harman have only bought the Kentmere Photographic division of Kentmere Ltd. The article didn't state the turnover of the photo division.

So Kentmere Photohraphic is not very large but as a paper manufacturer has always punched above its size in the market place, has modern coating machinery and very able photo-chemists/technicians.

15-20 years ago they were OK but with a reputation for inconsistency between paper batches, then they employed a new emulsion chemist. At the time reading the job advert & specification it seemed to indicate the recruit would need to come from Ilford or Kodak.

The new emulsion chemist tightened up of quality, but more importantly introduced Kentmere's Variable Contrast papers as well as other new papers including Fineprint.

With Kodak, Agfa and Forte out of the B&W paper market there appears to be a lot of synergy and potential for a merged Harman Kentmere.

We need to watch things unfold but my guess is well actually see new or improved products coming out of the merged company. Two coating plants also makes sense with the potential demands of the Bergger tie-up.

Ian

aldevo said:

Efke and Foma are still around. They are, AFAIK, both small (Efke is fewer than 30 people - can't get much smaller than that) and remain independent.

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Sorry, I suppose I was thinking of the myriad of small British manufacturers that were taken over by Ilford prior to WW2 (I tried to detail this in an article a few years ago

http://www.silverprint.co.uk/info/yespap.html

Sorry also for starting a new thread when I hadn't spotted the already healthy one that was going. I'll get me coat.

Best of luck!!! But if you change Kentona or the Bromide you'll have to answer to me Shawn

I suppose there's good and bad in this - I am sad to see a small long-established business get taken over, but that's the times...I hope Kentmere do manage to retain their character.

Am concerned to hear about Ilford dropping Cooltone developer - have they?? That must have passed me by, I bought some just recently. Really bad news if so, and not so very encouraging either if they are going to drop excellent products that they consider too 'esoteric.' It's still on their website and also in stock on RK photographic and Firstcall sites...

I was always wondering about that 20 year lease too... Amongst other considerations, it looks like this gives Ilford options when that 20 years are up for at least avoiding being stiffed by the freeholders. They have moved their coating plant before, no doubt they can do it again if they have to.

Also it presumably allows them to downsize if they need to in future, though I obviously don't know how easily Kentmere's coating facilities are adaptable to coating film. Interesting is that Kentmere's management has shown good business sense in the past, being privately owned, and selling off to Ilford to me sounds like they are not confident they could continue in the long term and are selling up while they can get a reasonable price.

The other good thing is that it shows Ilford are looking forward and not just letting the grass grow under their feet, which is encouraging.

As for the potential downsides: well, we shall see, but I have no intention of changing my purchasing habits, which include both companies' products (not that I imagine for a second that my purchases register the smallest iota of a suspicion of a blip on either company's sales graphs)...

All is, in any case, conjecture.

Bob.

P.S. Cate & others: yes: Cooltone developer is no more - Simon G. confirmed in another thread ((there was a url link here which no longer exists)).

Dear Bob,

Every customer matters, it always did and it always will...we report our daily sales down to the exact dollar...so your purchase does register..

Simon ILFORD Photo / HARMAN technology Limited :