Carestream Health, a portfolio company of Onex Corporation, has raised approximately $2.4 billion of new debt to fund a $725 million distribution to shareholders, refinance existing debt facilities and pay fees and expenses associated with this recapitalization.
The Onex Group will receive a distribution of approximately $673 million, of which Onex’ share will be approximately $295 million, including carried interest of $48 million. Combined with prior distributions, the Onex group will have received approximately $1.2 billion, representing a 2.6x gross multiple of invested capital and a 22% cash-on-cash rate of return. Following the completion of this transaction, Onex will continue to own approximately 91% of Carestream.
Carestream Health is a provider of dental and medical imaging systems and healthcare IT services; X-ray film and digital X-ray systems for non-destructive testing; and materials for the precision films and electronics markets. Carestream Health has annual revenues of approximately $2.4 billion and is based in Rochester, NY (www.carestream.com).
The Onex Group acquired Carestream in April 2007 in a corporate carve-out from its parent, the Eastman Kodak Company. Over the past six years, Onex has worked with management on various initiatives that have resulted in a stronger and faster-growing digital platform and increased cash flow generation from its film operations. In 2013, Carestream is expected to generate $457 million of EBITDA and approximately $190 million in free cash flow.
“This is an excellent outcome for Onex and Carestream,” said Robert Le Blanc, a Senior Managing Director at Onex. “Carestream is truly an outstanding company led by a terrific CEO, Kevin Hobert, and deep and talented management team. We look forward to our continued partnership to further build on Carestream’s success.”
Onex Corporation makes private equity investments through the Onex Partners and the ONCAP families of funds. Onex has more than $16 billion of assets under management and is based in Toronto with additional offices in New York and London (www.onex.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 6-11-13