U.S.-based medical and dental imaging systems provider Carestream Health Inc. announced it has entered into an agreement to sell its dental digital business to a private investment fund. The dental digital segment represents about 20% of Carestream's revenue, and has higher EBITDA contribution margins and growth rates compared to the company overall. In our view, the company's remaining businesses are less diversified, less profitable, have lower scale, and are facing secular revenue declines due to the falloff in the film businesses. We are revising our assessment of business risk to weak from fair. We expect the company to use net proceeds to retire debt, or less likely, for reinvestment. We estimate that debt leverage, post-transaction, will remain above 5x. We
