Eastman Kodak Company has entered into an agreement to sell its Health Group to Onex Healthcare Holdings, a subsidiary of Onex Corp.
Under terms of the agreement, Kodak will sell its Health Group to Onex for $2.55 billion. The price is composed of $2.35 billion in cash at closing and $200 million in additional future payments if Onex achieves certain returns with respect to its investment.
Because of tax-loss carry forwards, Kodak expects to retain the vast majority of the initial $2.35 billion cash proceeds. The company plans to use the proceeds to repay its approximately $1.15 billion of secured term debt.
Other potential uses of the cash proceeds are under review and will be discussed at Kodak’s previously announced investor meeting, scheduled for February 8.
Included in the sale are manufacturing operations focused on the production of health imaging products, as well as an office building in Rochester, NY.
About 8,100 employees associated with the Health Group will continue with the business following the closing.
It is anticipated that the sale will close in the first half of 2007.
[Kodak, January 10, 2007]