Clayton, Dubilier & Rice and Hillhouse/CareCapital Partner to Acquire Dental Digital Business from Carestream

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Apr 13, 2017, 14:00 ET

NEW YORK, April 13, 2017 /PRNewswire/ -- Clayton, Dubilier & Rice and CareCapital Advisors Limited, a specialist investment platform focused on dental and consumer health in Asia and part of Hillhouse Capital Management, today announced an agreement to acquire Carestream's dental digital business ("Carestream Dental"). Carestream Dental is a leading developer, manufacturer and marketer of imaging systems and practice management software for general and specialist dental offices globally. CD&R-managed funds will invest 75% of the equity in the transaction, while Hillhouse/CareCapital affiliates will provide 25%. Additional terms of the transaction were not disclosed.

Carestream Dental is a leading provider of dental technology with a portfolio of digital imaging equipment and practice management software that supports a global dental market undergoing rapid advances in standards of care and clinical efficiency. Carestream Dental holds more than 500 patents and offers a comprehensive line of 2D and 3D extraoral imaging and intraoral imaging equipment and related software that is complemented by the company's dental practice management software services, which manage all aspects of a dental practice from patient check-in to creation of digital patient records and image management. The company has approximately 1,500 employees worldwide and serves a large, diverse global customer base across more than 85,000 dental practices in more than 90 countries.

"Our investment in Carestream Dental lines up well with CD&R's strengths executing complex corporate carve-outs where there is meaningful transformation and growth potential," said CD&R Partner Derek Strum. "We are excited to invest behind a strong employee base and leading global brand in a consistently growing market with technology penetration tailwinds, and to partner with Hillhouse/CareCapital, who owns several dental platforms in China that will help Carestream Dental further capitalize on substantial emerging market growth opportunities."

"We are excited to partner with CD&R and share the firm's commitment to operational excellence," said Hillhouse/CareCapital Partner Dai Feng. "Carestream Dental has a tremendous heritage and brand in emerging markets, excellent products and technology, and talented and dedicated personnel. We are honored to help the company further develop its emerging markets strategy encompassing R&D, distribution and customer engagement."

Lisa Ashby, President of Carestream Dental, will become Chief Executive Officer of the company upon the closing of the transaction. "This is a landmark moment for Carestream Dental that positions the company for exciting future growth," said Ms. Ashby. "With the strong support of our new partners, we look forward to becoming even more effective in serving the dynamic needs of the global oral healthcare industry with innovative products, high quality services and an unwavering commitment to excellence in all that we do."

John Dineen, an Advisor to CD&R funds, will serve as Chairman. Mr. Dineen had a 28-year career at GE prior to his engagement by the CD&R funds, including serving as Chief Executive Officer of GE Healthcare. At GE Healthcare, John oversaw similar imaging technologies and software businesses and helped drive significant emerging markets growth, and is thus well-positioned to assist Carestream Dental management in the company's next phase of growth.

Citi, Credit Suisse, HSBC and ING have committed to provide debt financing for the transaction. Debevoise & Plimpton LLP is acting as legal advisor to CD&R, and Kirkland & Ellis LLP is acting as legal advisor to Hillhouse/CareCapital. Citi and Credit Suisse are acting as financial advisors to CD&R and Hillhouse/CareCapital. Jefferies LLC is serving as financial advisor and Arnold & Porter Kaye Scholer LLP is acting as legal advisor to Carestream. Subject to regulatory and other approvals, the transaction is expected to close in the third quarter of 2017.

About Carestream Dental

Carestream Dental is the dental digital business of Carestream, an operating company of Onex Corporation. Carestream is a worldwide provider of medical and dental imaging systems and IT solutions; X-ray imaging systems for non-destructive testing; and advanced materials for the precision films and electronics markets. Carestream Dental provides digital imaging equipment and software solutions for dental and oral health professionals. With more than 100 years of industry experience, Carestream Dental provides products that are used throughout the world and deliver more precise diagnoses, improved workflows and superior patient care. For more information, visit www.carestreamdental.com.

About Clayton, Dubilier & Rice

Founded in 1978, Clayton, Dubilier & Rice is a private investment firm. Since inception, CD&R has managed the investment of more than $22 billion in 72 companies representing a broad range of industries with an aggregate transaction value of more than $100 billion. The Firm's healthcare-related investments include VWR International, AssuraMed, Envision Healthcare, PharMEDium, Healogics, Vets First Choice, agilon health and Drive DeVilbiss Healthcare. The Firm has offices in New York and London. For more information, visit www.cdr-inc.com.

About Hillhouse/CareCapital

Hillhouse Capital Management was founded in 2005 and currently manages over $20 billion for institutional clients including university endowments, foundations, sovereign wealth funds, pensions and family offices. Hillhouse focuses on the consumer, healthcare, TMT, financials and business services sectors. CareCapital Advisors Limited specializes in operationally intensive investments in dental and consumer health businesses in Asia. CareCapital's dental portfolio encompasses digital dentistry, specialty clinics, management software, distribution, oral care, education and digital marketing.

SOURCE Clayton, Dubilier & Rice