|NDT.net||February 2007, Vol. 12 No.2|
TORONTO and NEW YORK – Onex Corporation (TSX: OCX) announced today that it will acquire the Health Group of Eastman Kodak Company in a transaction initially valued at approximately $2.78 billion (US$2.35 billion). Kodak Health Group is a leading provider of medical imaging and healthcare information technology solutions. Its offerings include digital x-ray systems, molecular imaging systems and x-ray film, as well as dental imaging products, software and services. As part of the transaction, Onex will also acquire Kodak’s non-destructive testing business, which sells x-ray film and digital x-ray products into the non-destructive testing market. Aggregate revenues of the businesses being acquired were approximately $3.0 billion (US$2.54 billion) for the twelve months ended September 30, 2006.
“This is a great opportunity to acquire and grow a business that has established an extraordinary record in delivering innovative solutions to customers around the world. We are very impressed with the Health Group’s world-class products in every sector: medical, dental, molecular imaging and non-destructive testing,” said Robert M. Le Blanc, an Onex Managing Director. “The Kodak Health Group has an exceptionally strong management team and we share this team’s vision for the future. We recognize that growth is critical and that digital technology is the future and we believe strongly that customers and employees must continue to be a top priority,” Le Blanc emphasized.
“We are delighted to join Onex, a partner that shares our enthusiasm to grow our business. This transaction creates an extraordinary opportunity for our global organization to meet the growing medical imaging and information needs of the healthcare community now and into the future,” said Kevin J. Hobert, President of Kodak’s Health Group. “Onex has a long track record of acquiring businesses and working with them to achieve superior growth and operational excellence. Onex’ expertise and its commitment to this business, together with the Health Group’s proven product portfolio, worldwide presence and highly talented employee base will result in tremendous opportunities to provide the best in customer service.”
“Onex is an ideal acquirer of Kodak’s Health Group because they understand the health industry and are committed to growing the business for the benefit of customers and employees,” added Antonio M. Perez, Kodak’s Chairman and Chief Executive Officer. “I’m very pleased that we have such a favourable outcome for all of our constituents.”
The equity investment of approximately $560 million (US$475 million) to complete the acquisition will be made by Onex Partners, Onex’ large cap private equity fund. The investment by Onex Corporation, as a limited partner in that fund, is expected to be approximately $222 million (US$188 million). The acquisition agreement provides that if Onex Partners realizes an internal rate of return in excess of 25% on its investment, Kodak will receive payment equal to 25% of the excess return up to US$200 million.
The transaction is subject to customary regulatory approvals and closing is anticipated in the first half of 2007. Onex was advised in the transaction by Credit Suisse and by Kaye Scholer LLP.
Onex manages third party private equity investments through the Onex Partners and ONCAP family of funds. It also manages a real estate fund and a public market fund. Through these activities Onex generates annual management fee income and is entitled to a carried interest on approximately $3.5 billion of third party capital.
Onex is a diversified company with annual consolidated revenues of approximately $20 billion and consolidated assets of approximately $20 billion. Onex is one of Canada’s largest companies with global operations in service, manufacturing and technology industries. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX.
For further information: Robert M. Le Blanc (212) 582-2211
For more information on Onex, visit its website at www.onex.com. Onex‘ security filings can be accessed at www.sedar.com.
*All amounts in Canadian dollars unless otherwise stated