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Shutterfly Inc. (SFLY - Analyst Report) has again showed its interest in Eastman Kodak Company. Recently, the leading Internet-based social expression and personal publishing services company inked a deal with Kodak Company to license 1,100 Kodak imaging patents along with some other patents that Kodak retains as part of its current business.

The move came in the wake of Eastman Kodak’s efforts to come out of the bankruptcy protection in the first half of next year. Eastman Kodak has finalized a set of agreements resulting in $525 million of monetization of its digital imaging patents.

The latest deal follows Shutterfly’s acquisition of Kodak Gallery online photo services in June-July this year for $23.8 million. Eastman Kodak Co, which had filed for bankruptcy protection in January this year, intends to streamline its model and concentrate on its core business to reap profits through these divestures.

Apart from Shutterfly, there are 11 more intellectual property licensees like Adobe Systems Inc. (ADBE - Analyst Report), Google Inc. , each of which will receive rights of the digital imaging patent portfolio and some other Kodak patents.

Shutterfly is focused on growing its business through strategic partnerships with retailers and acquisitions. Over the last one-year period, Shutterfly entered into a pact with FujiFilm to bring its photo creating and sharing website under its own platform as well as acquired an Israel-based photo software firm and a mobile application company Penguin Digital.

We believe such strategic acquisitions augur well for Shutterfly. Shutterfly is benefiting considerably from its scale advantage and vertical integration. Shutterfly currently retains a Zacks #3 Rank (short-term Hold rating). We are also maintaining our long-term Neutral recommendation on the stock.

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