Agfa Gevaert puts its healthcare IT unit on the block

Belgian digital imaging company Agfa Gevaert has put up its healthcare information technology business for sale as part of its plan to hive off the business into a separate entity. The company opened an auction of its healthcare IT business on Tuesday, reports citing people close to the matter said.

Agfa had announced plans to hive off the healthcare IT activities as an independent unit in 2017 and initiated the process this year, a Reuters report said adding that Agfa expects offers from rivals and private equity firms.
Best known among consumers for its photographic products, Agfa has transformed itself in recent years as a supplier to the printing industry and healthcare sector, providing products for the likes of radiology imaging and printed electronics.
First-round bids in the auction organised by JP Morgan was due on Tuesday, the report said, adding that the healthcare IT unit is expected to achieve core profit of about 50 million euros ($56 million) this year and could be valued at 14-15 times that at as much as 750 million euros.
German rival Compugroup is among the expected bidders along with Ardian-owned competitor Dedalus.
Private equity groups such as KKR, Permira and Advent could also hand in tentative offers, the sources added.
The company this year named Klaus Roehrig, founder of activist investment fund Active Ownership, as its new chairman.
Active Ownership holds 13.4 per cent of Agfa’s shares and has said it supports the company’s strategy, including the sale of the healthcare IT business.
Core earnings of the unit rose 35 per cent to 29 million euros in the first half of this year, helped by strong sales growth and cost-cutting measures, Agfa said in its half-year report.
The Agfa-Gevaert Group develops, produces and distributes an extensive range of imaging systems and IT solutions, mainly for the printing industry and the healthcare sector, as well as for specific industrial applications.
Agfa’s headquarters and parent company are located in Mortsel, Belgium. The Group’s operational activities are divided in four divisions: Offset Solutions, Digital Print and Chemicals, Radiology Solutions, and HealthCare IT. All divisions have strong market positions and well-defined strategies.
Agfa’s largest production and research centers are located in Belgium, the United States, Canada, Germany, France, the United Kingdom, Austria, China and Brazil. Agfa is commercially active worldwide through wholly owned sales organisations in more than 40 countries. In countries where Agfa does not have its own sales organization, the market is served by a network of agents and representatives.
Digital healthcare market is expected to report revenue gains exceeding 26 per cent in 2019. Digital Healthcare is the convergence of digital technologies with health, healthcare, living, and society to enhance the efficiency of healthcare delivery and make medicines more personalized and precise.
Key manufacturers include GE Healthcare, Truven Health Analytics, Agfa-Gevaert NV, McKesson, Abbott, Carl Zeiss AG, Leica Microsystems, Topcon Corp, Canon Inc, Heidelberg Engineering GmbH, Headwall Photonics, Inc, Optovue Inc, PerkinElmer Inc, Koninklijke Philips NV, Medtronic, Raytheon Company, ChemImage Corporation, CytoViva, Inc, Aseoptics, Volcano Corp, Michelson Diagnostics Ltd, Optical Imaging Ltd, Nidek Co Ltd among others.