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Kodak buys Imation unit
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August 3, 1998: 9:03 a.m. ET
Imation sheds most of its medical imaging business for $520M in cash
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NEW YORK (CNNfn) - Eastman Kodak Co. said it has agreed to acquire most of Imation Corp.'s worldwide medical imaging business for $520 million cash.
Under terms of the agreement, Kodak will assume control of Imation's manufacturing facilities in White City, Ore., and Oakdale, Minn., and all of the outstanding shares of Imation's Cemax-Icon subsidiary in Fremont, Calif.
Kodak said Imation's medical imaging business generates approximately $500 million in annual revenue. Approximately 1,600 Imation employees will transfer to Kodak.
Imation will retain its manufacturing facility in Ferrania, Italy, where the company will manufacture x-ray and wet laser medical imaging film for Kodak under a supply agreement for a minimum of two years.
Kodak said the deal will be neutral to its earnings in the first full year following its completion and will add to earnings thereafter.
Imation said it expects to report an after-tax gain of $75 million to $80 million after the deal closes.
Imation has become known for its computer data storage products, most notably through its SuperDisk product. The company said the sale of its medical imaging unit will allow it to focus on its data-storage business.
Separately, Kodak said it is shifting production of its x-ray film processors from its Elmgrove facility near Rochester, N.Y., to a plant in northern Mexico as part of its cost-cutting measures.
In January, Kodak officials said they were looking to make the Elmgrove facility near Rochester more profitable by shifting labor-intensive production to subcontractors or foreign plants. Kodak said relatively few jobs will be lost in the move.
Kodak has said it plans to cut costs by $1 billion over two years.
Kodak (EK) shares fell 1-5/8 in Friday trading to close at 83-7/8. Imation (IMN) shares closed at 15-13/16, up 1/2. 
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Eastman Kodak
Imation
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