Medical Imaging News

January 17, 2007

Onex to Acquire Kodak Health Group

Last week, Onex Healthcare Holdings Inc announced an agreement to acquire Kodak's Health Group for up to $2.55 billion.

The purchase price is composed of $2.35 billion in cash at closing. If Onex Healthcare investors realize an internal rate of return in excess of 25% of their investment, Kodak also will receive payment equal to 25% of the excess return, up to $200 million.

Toronto-based Onex, a subsidiary of Onex Corp, also will acquire Kodak's nondestructive testing business, which sells x-ray film and digital x-ray products into the nondestructive testing market.

Because of tax-loss carry forwards, Kodak expects to retain the vast majority of the initial $2.35 billion cash proceeds, which it plans to use as repayment of its $1.15 billion of secured term debt. Other potential uses of the cash proceeds are under review and will be discussed at Kodak's investor meeting, currently scheduled for February 8.

The transaction is subject to customary regulatory approvals and closing is anticipated in the first half of 2007.

In January 2005, Onex acquired Minneapolis-based Center for Diagnostic Imaging (CDI), which operates 39 outpatient diagnostic imaging centers in 9 US markets, for $190 million.

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