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Onex cancels Carestream sale after last buyout bidder pulls out

20 May 2013

xray_lrgCanadian private equity firm Onex Corp has scrapped its auction of medical imaging company Carestream Health after failing to find anyone to meet the $3.5bn top asking price, it is understood.

Bain Capital was the last remaining buyout house interested in a deal before it pulled out this week, while Thomas H Lee Partners reportedly lost interest earlier, three sources familiar with the matter told Reuters.

One source said Onex was now likely to pay itself a dividend through a recapitalisation of the company’s debt.

Carestream attracted heavy buyout interest when it was put on the block earlier this year, with Carlyle, Hellman & Friedman and KKR also reportedly keen on a deal.

Several bidders reportedly moved past the first round, but all have since fallen out of the process after failing to meet terms on a price.

Reuters said Onex was hoping to make eight times EBITDA from the sale, but added the buyout bidders were hoping for a deal as low as six times.

The firm picked up Carestream through a $2.35bn deal in 2007, which one of the Reuters sourced said valued the company at five times EBITDA at the time.

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