Jubilant executives from Eastman Kodak and Imation announced Monday evening that the two companies had completed the deal for Kodak to acquire Imation's medical imaging business in North America, Latin America, and Asia.
By Tuesday morning, the Kodak booth was decorated with festive balloons, banners celebrating the arrangement, and free-flowing (nonalcoholic) champagne.
"We believe there are tremendous opportunities in health imaging which expand beyond traditional diagnostic markets where we have competed for over a century," said Martin M. Coyne, II, Kodak vice president and Health Imaging president. "This acquisition brings important technology, physical assets, and top-notch individuals needed for us to take full advantage of those opportunities."
Kodak initially will pay $389 million in cash for Imation's businesses, and Imation will receive an additional $143 million over the next six months for the acquisition of its European medical imaging operations. During this interim period, Imation will act as a Kodak distributor in Europe, and Kodak will report the financial results as part of its operations.
The acquisition should contribute about $510 million in sales to Kodak's Health Imaging division as well as net assets valued at roughly $280 million. In addition, about 1,600 Imation employees worldwide will now be working for Kodak. Also transferring to Kodak control are Imation medical imaging facilities in California, Minnesota, and Oregon.
The agreement also settles certain intellectual property disputes between the companies in the U.S. and Italy.
Imation officials said they would use the proceeds of the sale to cover outstanding debt and lease obligations and buy back company stock.
"The sale of our medical business is beneficial to our customers, shareholders, and employees, and an important strategic step for Imation," said William T. Monahan, Imation chairman and CEO.
