Onex Corp., Toronto, announced it will acquire the health group of Eastman Kodak Co., Rochester, N.Y., in a deal initially valued at $2.35 billion. The sale is expected to close in the first half of this year.
The move to the Onex subsidiary, Onex Healthcare Holdings, will sharpen Kodak's strategic focus on consumer and professional imaging and the graphic-communications industry, officials said. Under the terms, Kodak will sell its health group for $2.35 billion in cash at closing plus up to $200 million in additional future payments if Onex, a private-equity firm, receives a return in excess of 25% of investors' investment.
Kodak said it will use the proceeds of the sale to fully repay its approximately $1.15 billion of secured-term debt. About 8,100 employees associated with the Kodak health group will continue with the business following the closing. Included in the sale are manufacturing operations of health imaging products as well as a Rochester office building. Through the 12 months ended Sept. 30, 2006, Kodak's health group reported revenue of $2.54 billion.