(1888PressRelease)
April 16, 2007 - Eastman Kodak Company has announced that it has entered into a definitive agreement to sell its Health Group to Onex Healthcare Holdings, Inc., a subsidiary of Onex Corporation, based in Toronto, Canada.
The multi-billion-dollar sale, expected to close in the first half of 2007, is subject to receipt of regulatory approvals. The sale aims to fulfill strategic intention to focus investment and increase financial flexibility.
While Carestream Health, Inc. will be the business’s name in the United States, the new name for the stand-alone company will vary somewhat by country to reflect local laws and practices.
In Singapore and Malaysia, the business will be known as Carestream Health Singapore Pte Ltd and Carestream Health Malaysia Sdn Bhd respectively.
The sale will sharpen Kodak’s strategic focus on consumer and professional imaging and the graphic communications industry worldwide. About 8,100 employees of the healthcare group, including those in Singapore and Malaysia, will continue with the business following the closing in May.
“This is fantastic news and is the outcome we've been driving for over the past several months. We now have a partner that has expertise in healthcare and understands the value and reputation the Health Group has built over the past 100 years,” said Mr. Kevin Hobert, President of Kodak’s Health Group.
Kodak’s Health Group is a worldwide leader in information technology, molecular imaging systems, medical and dental imaging, including digital x-ray capture, medical printers, and x-ray film.
Terms of Agreement
Under terms of the agreement, Kodak will sell its Health Group to Onex for up to US$2.55 billion. The price is composed of US$2.35 billion in cash at closing, plus up to $200 million in additional future payments if Onex achieves certain returns with respect to its investment.
If Onex Healthcare investors realise an internal rate of return in excess of 25% of their investment, Kodak will receive payment equal to 25% of the excess return, up to $200 million. Due to tax-loss carry forwards, Kodak expects to retain the vast majority of the initial $2.35 billion cash proceeds.
The company plans to use the proceeds to fully repay its approximately $1.15 billion of secured term debt. Other potential uses of the cash proceeds are under review.
