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Onex to buy Kodak division for C$2.78bn

The Toronto-based, publicly traded private equity firm will use its second fund, Onex Partners II, to acquire the medical imaging business.

Toronto-based Onex Corporation has agreed to buy Kodak Health Group, a medical imaging and healthcare information technology solutions provider that is part of the Eastman Kodak Company, for approximately C$2.78 billion ($2.36 billion; €1.82 billion), according to an Onex statement.

As part of the transaction, Onex will also buy Kodak’s “non-destructive testing business”, a division that sells x-ray film and digital x-ray products to the non-destructive testing market, the statement said. Non-destructive testing refers to the use of imaging technology to examine parts that cannot be seen without taking a particular item apart, explained Kevin Hobart, the president of Kodak’s Health Group.

The deal is expected to close in the first half of 2007.

“We recognize that…digital technology is the future and we believe strongly that customers and employees must continue to be a top priority,” Robert Le Blanc, a managing director at Onex, said in the statement.

Onex is drawing on its second fund, Onex Partners II, to invest in Kodak. The company has committed C$560 million to complete the acquisition. Onex Corporation, as a limited partner in its own fund, has committed C$222 million in Onex Partners II.

In December, Onex Corporation joined Goldman Sachs Capital Partners, the New York-based private equity arm of global investment giant Goldman Sachs in an agreement to buy Raytheon Aircraft Company, a manufacturer of business and special-mission aircraft, from its parent company, Waltham, Massachusetts-based Raytheon Company, for approximately $3.3 billion.