Onex closes on Kodak Health Group and looks to the future

Apr 30, 2007

Toronto-based Onex Healthcare Holdings, a subsidiary of Canadian investment firm Onex, today completed its acquisition of Eastman Kodak Health Group for $2.35 billion (U.S.), officially changing the name of the entity to Carestream Health.

The Rochester, NY-based company has annual sales from its imaging and IT product lines of approximately $2.5 billion. The product portfolio includes Carestream, DirectView, Softdent, Industrex, X-Sight, and PracticeWorks.

Onex announced its plans in January to acquire the Kodak Health Group.

Carestream Health CEO Kevin Hobert. Image courtesy of Carestream Health.

Speaking with AuntMinnie.com, CEO Kevin Hobert said with the acquisition completed, Carestream Health will go "about putting together and executing a growth strategy. We want to be one of the companies that change the landscape of healthcare."

Specifically, Hobert said the company is "looking at how we can go even faster on internal development, how we can go faster in building out our go-to-market for the digital businesses, and expanding on the sales that we have today in 150 countries around the world." Those strategies, he added, are also the biggest challenges.

Carestream also plans to expand its product portfolio through global acquisitions in dental and healthcare IT, adding that radiology and the electronic patient record markets offer some of the best opportunities.

While no major changes are expected in the short term, Hobert said Carestream will make adjustments in areas of the company where business is growing and declining. Analog film use, for example, has been declining for some time and "even digital film with some printers has started to decline globally, though there are, of course, some markets of the world that are growing," he said.

In those areas, Carestream may consolidate in the future. "So, we are looking at, for instance, our manufacturing assets and seeing what else we can do," Hobert said. "We are coating other products for other Fortune 100 companies outside of healthcare. That is one way to ensure we can maintain our cost position and continue to offer film to our customers and make the most of our people and assets."

In March, Kodak Health Group received Health Canada approval for its DirectView computed radiography (CR) mammography product. Carestream will continue to market the system in Europe and Asia, as Kodak has. Hobert estimated there are approximately 1,000 DirectView installations globally.

Kodak last year applied for clearance for its CR mammo technology from the U.S. Food and Drug Administration. The company successfully completed its manufacturing and technology review by the agency, which currently is reviewing clinical studies for DirectView.

By Wayne Forrest
AuntMinnie.com staff writer
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