Eastman Kodak Co. cut loose its health group last
week, agreeing to sell one of the most prominent names
in X-ray technologies to Onex Healthcare Holdings, a
subsidiary of Onex Corp. in Toronto, for approximately
"It was right in line with the corporate goals of
Kodak to focus on a certain aspect and get back to a
core strategy for Kodak's business," said Steve Tobin,
a healthcare information technologies analyst at market
research firm Frost & Sullivan. "I think it continues
to say that there are only a few dominant players in
the imaging industry right now."
The deal may stir up some nostalgia but it should not
have much effect on the business of snapping images of
broken bones, congested lungs and other assorted
maladies, said Leonard Berlin, chairman of the
department of radiology at 224-bed Rush North Shore
Medical Center in Skokie, Ill.
"The name 'Kodak' has been synonymous with X-ray. I'll
be saddened when there is no more Kodak. Nonetheless,
from a practicing point of view, I don't think it will
affect us," Berlin said.
Onex, a publicly traded diversified holding company and
one of Canada's largest corporations with $19 billion
in revenue, agreed to buy Kodak's health group for
$2.35 billion in cash at closing, expected in mid-2007,
plus up to $200 million in additional payments if Onex
receives a return of more than 25% of its investment.
Kodak said the move will sharpen its strategic focus on
its core consumer, professional imaging and graphic
About 8,100 employees associated with the Kodak health
group will continue with the business in Rochester,
N.Y. Included in the deal are the 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.
"I think it's a great thing for us," said David
Waldman, a radiologist and chief of the department of
imaging sciences at the 973-bed Strong Memorial
Hospital of the University of Rochester (N.Y.) Medical
Center. "The Kodak company has been having difficulty
balancing their two buckets of business. They didn't
have the capital to support either one to the best of
their ability, and this gives them an opportunity to
develop their imaging technology and develop themselves
as a market player."
The teaching hospital has a research arrangement with
Kodak, testing a lot of the company's healthcare
products, offering suggestions on what can be done to
improve them and relying on a lot of Kodak equipment,
including its picture archival communication system, or PACS, he said. "I think it's going to improve" the
healthcare offerings, Waldman said. "The Onex company,
I think, will have the capital to move their technology
It's also great for the economic vitality of the city
of Rochester, he added.
In the short term, at a minimum, the Kodak name will
continue to brand the imaging products and accessories
although the company itself will probably find a new
name after the closing in mid-2007, a spokesman said.
Onex already owns several healthcare companies,
including the Center for Diagnostic Imaging, a provider
of diagnostic and therapeutic radiology services at 35
centers mostly in the Midwest, according to officials
during a conference call last week.
In other imaging business news, Fujifilm Medical
Systems USA last week announced the acquisition of
cardiology PACS vendor Problem Solving Concepts,
Indianapolis. The deal, which has already closed, will
enable Fujifilm to extend its IT reach to cardiology,
officials said. Financial terms were not disclosed.What do you think? Write us with your
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