updated 1/10/2007 2:50:31 PM ET 2007-01-10T19:50:31

Camera company Eastman Kodak Co. said Wednesday it will sell its health group unit to Onex Healthcare Holdings Inc., a subsidiary of Canadian investment company Onex Corp., for up to $2.55 billion.

Under terms of the deal, Kodak will receive $2.35 billion in cash at closing, and up to an additional $200 million in future payments if Onex Healthcare investors realize an internal rate of return of more than 25 percent of their investment.

Kodak expects to retain most of the $2.35 billion in cash proceeds and plans to use them to repay about $1.15 billion of secured term debt and for other undisclosed purposes.

About 8,100 employees associated with the health group, which provides medical imaging systems and services, will continue with the business, according to Kodak. The deal is expected to close in the first half of 2007.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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