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Kodak To Acquire Laser-Pacific

Eastman Kodak Company (NYSE: EK) announced today that it has entered into an agreement to purchase Laser-Pacific Media Corporation (Nasdaq NM: LPAC), a leading Hollywood-based post-production company with $31.8 million in revenues in fiscal year 2002. Under terms of the agreement, Kodak will acquire the outstanding shares of Laser-Pacific at a price of $4.22 per share. The purchase price, totaling $30.5 million, will be paid in Kodak stock or cash at Kodak’s option. As of Mar. 31, 2003, Laser-Pacific had $3.3 million in net debt.

Laser-Pacific will operate as a wholly owned subsidiary of Kodak, reporting to the company’s Entertainment Imaging products and services operation. Emory Cohen, co-founder and president of Laser-Pacific, will lead the subsidiary.

Founded in 1990, Laser-Pacific is well recognized in the Hollywood entertainment community. A winner of six Emmyâ awards for outstanding achievement in engineering development, Laser-Pacific provides a full spectrum of post-production services for television, home video and motion pictures. These services include high-quality film processing, state-of-the-art film transfer, editing, mastering, digital preview services, and DVD compression and authoring.

The acquisition will allow Kodak to establish a major presence in television post-production and further extends the company’s current digital services capabilities in the feature film market.

“Our customers have been encouraging us to participate more broadly in the services business,” said Eric Rodli, president, Entertainment Imaging products and services, and senior vice president, Eastman Kodak Company. “Consistent with our history of developing hardware and software tools that helped set industry standards for digital film scanning, recording, and image manipulation, this acquisition supports our growth strategy of expanding the benefits of film and making digital technology more useful to customers.”

“This is a natural alliance,” said Cohen. “There is a mutual commitment to supporting the creative community by providing products and services which enable the use of film and digital tools in their highest quality and most efficient forms. Kodak’s depth of technology and global brand presence, combined with Laser-Pacific’s history of innovation, service and operational efficiencies, will create a service organization poised to meet the expanding needs of our industry.”

Laser-Pacific and Cinesite, Kodak’s visual-effects and digital restoration and mastering subsidiary, will make up the hub of Kodak’s worldwide entertainment imaging services group led by General Manager Bertrand Decoux.

“The motion picture industry is at a crossroads,” Decoux said. “The convergence of film, digital and hybrid imaging technologies are changing the way movies are produced and distributed. The acquisition of Laser-Pacific is a logical combination. By playing a larger role in the service sector, we can ensure that the support our customers need is both accessible and affordable, while maintaining high image quality standards and creating work of greater value.”

 “This acquisition is consistent with Kodak’s commitment to offer a full array of the highest quality services available in the motion picture and television industries,” Decoux said. “Cinesite London will provide state-of-the-art digital visual effects, practical effects, and models and miniatures services, while Cinesite Hollywood and Laser-Pacific will concentrate on providing high-quality digital mastering and restoration services for feature films. In addition, Laser-Pacific will continue to provide the episodic television market with its award-winning post-production services.”

“This blending of capabilities will benefit both our customers and our staff,” Cohen said. “We will provide Kodak with unique insights into the needs of the industry, strong customer relationships, and proven know-how. At the same time, we will benefit greatly from access to Kodak color science and imaging technology.”

Kodak is the world leader in providing film, digital and hybrid motion imaging products, services and technology for the television, feature film and new media industries.

The transaction is subject to the approval of Laser-Pacific’s stockholders, SEC regulatory compliance and certain other customary conditions. The parties expect that the acquisition will close early in the fourth quarter of 2003. Kodak does not anticipate that the acquisition will have a material impact on its earnings.

For more information, visit

www.kodak.com/go/motion.

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