Kodak sells global health business to Toronto's Onex Corp

New Delhi, Jan 11 (UNI) Eastman Kodak Company today said it will sell its health group to Onex Healthcare Holdings, a subsidiary of Toronto's Onex Corporation, for 2.55 billion dollars.

The price is composed of 2.35 billion dollars in cash at closing, plus up to 200 million dollars 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 per cent of their investment, Kodak will receive payment equal to 25 per cent of the excess return, up to 200 million dollars,'' Kodak said.

Kodak's Health Group, with global revenues of 2.65 billion dollars in 2005, deals in medical and dental professions with advanced healthcare products, services and information technology solutions.

Kodak Health in India, with Rs 170 crore revenue in 2005, has a portfolio of image information products, services, applications and integrated systems, including X-ray films, laser films, CR systems and medical laser printers for CT and MRI.

About 8,100 employees associated with the health group will continue with the business following the closing. Included in the sale are manufacturing operations focused on the production of health imaging products, as well as an office building in Rochester, New York.

Because of tax-loss carry forwards, Kodak expects to retain the majority of the initial 2.35 billion dollars cash proceeds. The company plans to use the proceeds to fully repay its about 1.15 billion dollars of secured term debt.

Other potential uses of the cash proceeds are under review and will be discussed at the company's previously announced investor meeting on February 8.

''This sale maximises shareholder value by obtaining a full and fair valuation for this business, and allows Kodak to increase its financial flexibility. We now plan to focus our attention on the significant digital growth opportunities within our businesses in consumer and professional imaging and graphic communications,'' said Kodaks Chairman and Chief Executive Officer Antonio M Perez.

Onex brings significant financial resources to invest in the health group business and to ensure its continued success, he added.

Onex Corporation, with annual consolidated revenues of 20 billion Canadian dollas and consolidated assets of nearly 20 billion Canadian dollars, has global operations in health care, service, manufacturing and technology industries.

Subject to regulatory and other approvals, the sale is anticipated to close in the first half of 2007.

Goldman, Sachs&Co acted as financial advisor to Kodak on the sale and Sullivan&Cromwell LLP provided legal counsel.

UNI