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Eastman Kodak : Kodak Completes Sale of Health Group to Onex

05/01/2007 | 08:00am US/Eastern
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Eastman Kodak Company (NYSE:EK) announced today that it has completed the sale of its Health Group to an affiliate of Onex Corporation (TSX: OCX), for up to $2.55 billion. The acquired business is continuing under the name Carestream Health, Inc.

Kodak has received $2.35 billion in cash, and will receive up to $200 million in additional future payments if Onex achieves certain returns with respect to its investment. Primarily because of tax-loss considerations, Kodak expects to retain the vast majority of the initial $2.35 billion cash proceeds. As previously indicated, the company plans to use a portion of the proceeds to fully repay its approximately $1.15 billion of secured term debt.

Approximately 8,100 employees associated with the Health Group have transferred to Carestream Health. The business is a worldwide leader in information technology, molecular imaging systems, medical and dental imaging, including digital x-ray capture, medical printers, and x-ray film.

?We are now studying options for the cash that will remain after we pay off the secured term debt,? said Antonio M. Perez, Chairman and Chief Executive Officer. ?Through this rigorous process with our Board of Directors, we are focusing on financially attractive ways to drive profitable growth and enhance shareholder returns.?

CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements in this press release may be forward-looking in nature, or "forward-looking statements" as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to the Company's expectations concerning the retention of the cash proceeds and the use of the cash proceeds from the sale of the Health Group are forward-looking statements.

Actual results may differ from those expressed or implied in forward-looking statements. In addition, any forward-looking statements represent the Company's estimates only as of the date they are made, and should not be relied upon as representing the Company's estimates as of any subsequent date. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if its estimates change. The forward-looking statements contained in this report are subject to a number of factors and uncertainties, including the successful:

  • execution of the digital growth and profitability strategies, business model and cash plan;
  • implementation of the cost reduction programs;
  • transition of certain financial processes and administrative functions to a global shared services model and the outsourcing of certain functions to third parties;
  • implementation of, and performance under, the debt management program, including compliance with the Company's debt covenants;
  • development and implementation of product go-to-market and e-commerce strategies;
  • protection, enforcement and defense of the Company's intellectual property, including defense of our products against the intellectual property challenges of others;
  • implementation of intellectual property licensing and other strategies;
  • completion of information systems upgrades, including SAP, the Company's enterprise system software;
  • completion of various portfolio actions;
  • reduction of inventories;
  • integration of acquired businesses;
  • improvement in manufacturing productivity and techniques;
  • improvement in receivables performance;
  • improvement in supply chain efficiency; and
  • implementation of the strategies designed to address the decline in the Company's traditional businesses.

The forward-looking statements contained in this report are subject to the following additional risk factors:

  • inherent unpredictability of currency fluctuations, commodity prices and raw material costs;
  • competitive actions, including pricing;
  • changes in the Company's debt credit ratings and its ability to access capital markets;
  • the nature and pace of technology evolution;
  • changes to accounting rules and tax laws, as well as other factors which could impact the Company's reported financial position or effective tax rate;
  • general economic, business, geo-political and regulatory conditions;
  • market growth predictions;
  • continued effectiveness of internal controls; and
  • other factors and uncertainties disclosed from time-to-time in the Company's filings with the Securities and Exchange Commission.

Any forward-looking statements in this report should be evaluated in light of these important factors and uncertainties.


© Business Wire 2007
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