Eastman Kodak Co. is buying the medical imaging business of Imation Corp. for approximately $520 million in cash.
The deal gives Kodak manufacturing facilities in White City, Ore., and Oakdale, Minn., as well as all the outstanding shares of Imation's Cemax-Icon subsidiary in Fremont, Calif.
Imation advanced 2 1/8 to 17 15/16 on news of the deal; Kodak lost 1 1/8 to 82 3/4.
Imation's medical imaging business has annual sales of $500 million. Approximately 1,600 of Imation's 9,500 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. Under a separate supply agreement, Kodak will supply document imaging products to Imation.
The transaction also settles litigation arising from intellectual property disputes between the companies. Kodak had charged that Imation, formerly a part of Minnesota Mining & Manufacturing Corp., stole trade secrets.
Kodak does not expect the transaction to have an adverse impact on its previously announced cost reduction goals. Last winter, Kodak announced plans to trim 19,900 jobs by the end of 1999 in an effort to reduce its costs by $1.5 billion.
The deal must still receive regulatory approvals. The transaction is expected to close in the first quarter of 1999.
Among Imation's products are its trademark DryView laser imaging systems, wet laser imagers, chest systems, Imation's trademark Trimax X-ray films, conventional X-ray film processing systems, wet laser films, and digital picture-archiving and communication systems.
Imation, based in Oakdale, Minn., had 1997 revenues of approximately $2.2 billion.