Kodak investigates ‘strategic alternatives’ for health group

Eastman Kodak Company announced that it is exploring strategic alternatives for its health group. The options are understood to include a disposal or joint partnership.

Kodak’s Health Group, which is one the largest global players in the field of health imaging, including digital x-ray capture, medical printers and x-ray film, had revenues of £1.46 billion in 2005.

However, in the wider healthcare IT market the company is a mid-tier player facing a potential squeeze between giants such as Siemens and GE and smaller, nimbler providers which don’t carry the same cost overheads.

According to Kodak’s chief executive officer the decision to explore strategic alternatives has arisen due to Kodak’s strategy of being a top three player in each of the businesses in which it competes and due to the degree of consolidation occurring within the industry.

Antonio M. Perez, Kodak’s chairman and chief executive officer, said: “We have proven products and technology, a well-known and respected brand, worldwide distribution, a large, satisfied and loyal customer base and employees with unrivaled experience in health imaging.

Perez added: “While the health group is enjoying strong organic growth in elements of its digital portfolio, such as digital capture solutions and healthcare information solutions, we have been observing for some time consolidation in this industry. Given our valuable assets and the changing market landscape, we feel that now is the time to investigate strategic alternatives.”

A spokesperson for Kodak’s Health Group told E-Health Insider: "We are confident we are making the right decision to seek alternative strategies for the business and we expect our customers and employees will recognise the mutual benefits of our decision."

The spokesperson added that there were no preferred options at this stage, and "no pre-existing strategic conversations underway" with potential purchasers or partners. "That’s why we’ve appointed Goldman Sachs as advisers."

The spokesperson stressed that diverting the business "is just one option, but we are looking at all options to maximize the value of the business".

In the UK Kodak has a contract to provide Picture Archiving and Communications Systems (PACS) and Information Management System to NHS organisations across Scotland.

Kodak is also understood to still have a contract with Computer Sciences Corporation (CSC), as a sub-contractor providing elements of PACS and Radiology Information Systems to the North West and West Midlands region of the NHS in England, under the National Programme for IT (NPfIT).

However, due to changes within the NPfIT programme, it is now anticipated that Kodak will soon be largely supplanted in the CSC contract by GE and HSS – already the PACS/RIS suppliers in the South of England.