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Subject:

Kodak buys $500m dental imaging company

Author:
A kodak moment.

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Date Posted: 22:20:56 07/21/03 Mon

Kodak buys $500m dental imaging company
By Neil Buckley in New York
Published: July 21 2003 21:00 | Last Updated: July 21 2003 23:11

Eastman Kodak is taking a further step to diversify its business beyond photographic film with a $500m deal to buy PracticeWorks, a dental software and imaging company.

The acquisition is part of a continuing move by Kodak into areas such as digital cameras, software and services, as traditional film sales have been eroded by lower-margin digital photography. Film sales have suffered even more in recent months as a weak economy, terrorism fears and the Sars epidemic hit holiday travel.

Kodak became the market leader in medical dry laser printing through its 1998 acquisition of Imation's medical imaging business.

It sees the PracticeWorks deal in a similar light, saying it would help make it the leader in dental practice management software - which helps dentists manage front-office functions such as billing and records - and digital dental x-rays.

Kodak said DPMS software could be combined with digital radiography to integrate dental images and information. "We will be able to offer choices within a full spectrum of dental imaging products and services - from traditional film to digital radiography and photography," said Dan Kerpelman, president of Kodak's health imaging group.

Kodak is paying $21.50 for each common share of PracticeWorks and $7.33 for each preferred share, plus about $34m in net assumed debt and transaction fees.

It will also become owner of Paris-based Trophy Radiologie, a developer and manufacturer of dental digital radiography equipment acquired by PracticeWorks last December.

Kodak said the deal would add about $215m to revenues in the first full year. Standard & Poor's, ratings agency, last night lowered the long-term credit rating of Eastman Kodak to BBB - two notches above junk status - from BBB+ due to the proposed acquisition, reports AFX.

Steve Wilkinson, S&P credit analyst, said the purchase of the dental imaging software company would impede Kodak's debt reduction efforts.

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