Kodak has completed the sale of its Flexographic Packaging Division (FPD) to Montagu Private Equity for a purchase price of $340m.

The company announced the deal in November.

The estimated total consideration of the deal includes a base purchase price of $340m and potential earn-out payments of up to $35m until 2020. Montagu will also pay $15m as a prepayment to Kodak at closing.

Kodak will use the net proceeds from the transaction to decrease the outstanding term debt, and expects to refinance the remaining debt.

FPD is now part of Montagu’s portfolio and will operate as a standalone company named Miraclon. The division’s leadership team will continue to directly manage Miraclon.

Montagu has plans to develop, manufacture and market flexographic products such as the Kodak Flexcel NX System for the packaging print segment through Miraclon.

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“This is one of many steps we are taking to increase our financial stability and focus on generating cash for our shareholders.”

Kodak executive chairman Jim Continenza said: “Closing this sale was a priority for Kodak, and I’m proud we were able to execute on this plan and leverage a homegrown asset.

“This is one of many steps we are taking to increase our financial stability and focus on generating cash for our shareholders.”

Kodak will now focus on the growth areas of its Sonora environmental plates, enterprise inkjet, workflow software and brand licensing. It also plans to maximise value in commercial printing, film and advanced materials.

UBS Investment Bank served as exclusive financial advisor while Akin Gump Strauss Hauer & Feld served as legal advisor to Kodak for the transaction.

Ernst & Young acted as the financial advisor, Bain was the commercial advisor, and Linklaters was the legal advisor.