Agfa Gevaert expects multiple bids for healthcare IT unit: sources

FRANKFURT (Reuters) - Belgian digital imaging company Agfa Gevaert AGFB.BR expects offers from rivals and private equity firms as it opens an auction of its healthcare information technology business on Tuesday, people close to the matter said.

FILE PHOTO: A view of the headquarters of Belgium's imaging technology company Agfa Gevaert in Mortsel, near Antwerp, March 7, 2012. REUTERS/Yves Herman

Agfa had announced plans to carve out the healthcare IT activities as a standalone legal entity in 2017 and began the process this year as it looks to streamline operations, the sources told Reuters.

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 organized by JP Morgan JPM.N are due on Tuesday, the sources 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 COPMa.DE, which trades at 16.6 times expected core earnings, is among the expected bidders along with Ardian-owned competitor Dedalus DEDAL.PA.

Private equity groups such as KKR KKR.N, Permira and Advent could also hand in tentative offers, the sources added.

Agfa and the potential bidders declined to comment or were not immediately available for comment.

The company this year named Klaus Roehrig, founder of activist investment fund Active Ownership, as its new chairman.

Active Ownership, which made headlines in 2017 for pressuring German drugmaker Stada into a sale to private equity, holds 13.4% 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% 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.

($1 = 0.8975 euros)

Reporting by Arno Schuetze; Editing by David Goodman