Imation has exited graphic arts with the sale of its Matchprint colour proofing and related business to Kodak Polychrome Graphics (KPG) for 35m ($50m) in cash.

"We hope that we will now be able to offer a broader range of colour management options both for digital and conventional production," said KPG director of corporate and worldwide marketing communications Beth Hogan Scott.

The deal, which is subject to both US and European regulatory review, should be completed by the end of this year.

Hogan Scott said talks had started earlier in the summer following Imations review of its businesses.

As part of the deal, 500 staff will transfer from Imation to KPG, which has bought Imations colour proofing, film, plate and colour software products, as well as its colour technologies factory in Oklahoma.

Hogan Scott said the staff transfer would affect those working in the colour technology divisions in the US and across Europe, including the UK.

Imation has also turned last years third-quarter net loss of 23.6m into net income of 7.1m this year.

It said its 9.4m operating income for the quarter was on track with its range for the full year.

Imations Data Storage net income rose to its highest level for eight quarters at 10m, compared to a 2.5m loss for the same period last year.

Imation expects 2001 revenues to be down 5-7%, and to take a transition cost 14m over two years following the completion of the colour business sale to KPG.

Story by Andy Scott