Sources inform "Globes" that Eastman Kodak (NYSE: EK) is closing its Israeli subsidiary PictureVision and firing its 36 employees in Israel, along with almost 100 workers in the US.
PictureVision was founded in 1995 by Phil Garfinkle, Yaacov Ben-Yaacov, and Elliot Jaffe. The company developed a product called "PhotoNet" that lets pictures be stored and shared through the Internet.
Kodak acquired 51% of PictureVision in February 1998 for $50 million in cash, based on a company value of $100 million. Three months later, America Online (AOL) acquired 20% of the company, based on a company value of $200 million. 18 months ago, Kodak acquired full control of the company, buying out both AOL and PictureVision's stakes for $90 million.
Employees were notified of the company's impending closure last Wednesday. Kodak announced the measure would take effect in March 2002. Employees will be laid off in two groups, on 3 December and at the end of March 2002. All employees will receive two months' severance pay, in addition to the compensation mandated by law. Kodak stated that it was considering transferring key employees in its Israeli office to its New York headquarters, if it finds that doing so would be worthwhile.
PictureVision was considered the darling of Shlomo Kalish's Jerusalem Global Ventures, which raised PictureVision's initial $300,000. In July 1999, at the peak of the Nasdaq Internet bubble, Kalish thought PictureVision could be issued at a company value of $1 billion, but said the company’s major shareholder, Kodak, opposed issuing at that time.
After the sale of the company, two of PictureVision's founders, Garfinkle and Ben-Yaacov, founded venture capital firm Yazam, which tried to connect young entrepreneurs with potential investors. After the collapse of the dot.com bubble, Yazam was eventually sold to US Technologies in February this year.
Kodak is traded on NYSE at a market value of $8.5 billion. The company announced in late October that it would meet its third quarter forecasts of $96 million in profits ($0.52 profit per share), but that revenue would contract 8% to $3.3 billion and 4,000 employees would be laid off. Kodak also lowered its fourth quarter forecasts, stating that its profit per share would not exceed $0.15.
Published by Israel's Business Arena on 19 November 2001