Eastman Kodak Co. last week agreed to acquire most of the medical-imaging business of Imation Corp. for about $520 million in cash, a move that broadens Kodak's product line of diagnostic film to include direct capture of digital images.
Central to the deal, Kodak executives said, is Imation's dry laser-imaging business, which converts computed tomography and magnetic resonance images to a digital printout without having to first transfer the image to film.
Kodak is a leader in photographic processes for diagnostic images, producing the first X-ray film 100 years ago, said Martin Coyne, president of Kodak's health imaging division and a vice president of the Rochester, N.Y.-based company.
But digital technology, which develops computerized images, now accounts for 30% of imaging business, Coyne said.
Imation, spun off two years ago from Minneapolis-based Minnesota Mining and Manufacturing, also markets products for data storage and graphic arts imaging. The Oakdale, Minn.-based company had revenues of $2.2 billion in 1997; the medical-imaging business accounted for about a fourth of the total.
The acquisition of that medical-imaging unit also represents "a very strong commitment and message from senior Eastman Kodak management" that the company is in healthcare for the long haul, Coyne said.
Since the company's 1994 divestiture of Sterling Drugs, there had been "a fair amount of speculation" in the industry that Kodak might divest its healthcare business, he said.
The deal is subject to regulatory approval.