Monday, February 25, 2013

Carestream For Sale!

I've always thought the name "Carestream" lent itself far more to a urological product than the imaging field, and perhaps there are those out there who agree. It seems that Carestream, the Kodak spin-off, is to be sold off, hopefully for a lot of money.  From Reuters:
(Reuters) - Carestream Health Inc, which provides medical imaging systems and other healthcare technology solutions, is looking for a buyer in a deal that could fetch as much as $3.5 billion, people familiar with the matter said on Monday.

Carestream, which was acquired by private equity firm Onex Corp for $2.35 billion in 2007, has hired Goldman Sachs Group, Bank of America Merrill Lynch and Credit Suisse Group to run a sale process, the people said.

The Rochester, New York-based company was formed in 2007 when the Canadian buyout firm bought Eastman Kodak Company's health group and renamed the business Carestream. The company provides digital X-ray systems, molecular imaging systems and dental imaging products, software and services.

The auction of Carestream, which is in early stages, has drawn initial interest from several large private equity firms, the people said, adding that industry buyers are less likely to participate given the company's low to negative growth.

First-round offers are due this week, one of the people added.

Carestream has around $450 million in annual earnings before interest, tax, depreciation and amortization (EBITDA) and could be sold for 7 to 8 times EBITDA, two of the people said.

All the people asked not to be named because the auction is not public. A Carestream spokesman said the company does not comment on rumor or speculation. Onex could not be immediately reached for comment, while Goldman Sachs, Bank of America and Credit Suisse declined to comment.
I've had a look at Carestream's PACS offerings over the years, and they were by and large well-written.  But given the somewhat iregular history of this Kodak legacy, the current troubles are no surprise. You'll recall that Kodak's early ventures into PACS utilized the old Cemax-Icon system, which was Macintosh-based. When the users outgrew this software, Kodak bought out the Israeli firm Algotec in 2003, and I believe they have continued the software under the new name, Carestream, when Onex bought them out in 2007. They've got quite a few installations (anyone know how many?) and so the purchase of the company might be useful for the customer base if nothing else. Of course, a ready-made portfolio of PACS and imaging isn't a bad bundle, either.

We'll see what this little gem brings at auction.


Anonymous said...

I've always been impressed with the amount of R&D that Carestream perform to develop their products. I hope that the sale does not affect this constant product improvement.

Anonymous said...

AGFA will be next sometime at the end of 2014/early 2015 due to not making the promised numbers when they refied the company back in 2011. If the credit market tightens up and there is a strong consensus it will then AGFA creditors will sell the company in three pieces. AGFA Healthcare which is 1 part of the main company is now a private company and there is a reason for that, they are getting ready for the inevitable. I don't believe agility platform will work or save the company. Any doubts about what I'm saying just look at their financials and what their analysts are recommending (SELL!!!).The AGFA PACS was rated just above Siemens from the 2013 KLAS report. Time is up and the consolidation in healthcare is starting to windup. Any sucker who buys AGFA 7.0 will regret it.