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ITT to buy Kodak remote sensing business

Photography icon Eastman Kodak Co., realigning its holdings as it launches full-steam into digital imaging, is selling its historic remote-sensing-systems unit to ITT Industries Inc. for $725 million. ITT Industries, based in White Plains, N.Y., is a developer of space-based sensors and image information processing services.

The deal, announced this week is aimed at strengthening its presence in the $6 billion remote sensing market, which includes devices used in space exploration and spy equipment.

Kodak said it expects all 1,800 employees in its Rochester-based remote-sensing business, including a research systems subsidiary in Colorado, will transfer to ITT Industries, which is launching a new space systems division here. The business sprouted in the early 1900s when Kodak created the first reconnaissance film for the U.S. military. In more recent times, its scientists developed precision optical components to capture extreme close-ups of soil and dust particles on the surface of Mars.

After transaction costs and taxes, Kodak expects the sale will bring in about $475 million in cash. The deal was not expected to alter Kodak’s operating earnings projections of $2.25 to $2.55 in 2004. But profits calculated along generally accepted accounting principles will rise to a range of $2.25 to $2.75 a share, up from 80 cents to $1.30, it said. ITT Industries, a diversified industrial manufacturing company, chiefly serves the defense and aerospace industries, but its products range from ground-station satellite control stations and industrial water pumps to electronics components and automotive parts.

It generated $5.6 billion in sales last year and employs some 36,000 people.

In line with that ambitious new strategy, Kodak revealed in January that it is cutting 12,000 to 15,000 more jobs – or nearly a quarter of its work force – over the next three years. Kodak’s global work force, which peaked at 136,500 in 1983, could shrink to World War II-era levels of around 50,000 by 2007.