February 27, 2009
Olympus Corporation Agrees to Strategic Divestment of
Diagnostic Systems Business to Beckman Coulter, Inc.
Olympus Corporation ("Olympus") today announced that it has signed an agreement to divest its diagnostic systems business to Beckman Coulter, Inc. ("Beckman"). The divestment is scheduled for July 1, 2009, pending regulatory approval.
Since Olympus entered the diagnostic systems market in 1971 almost four decades ago, Olympus has been engaged in the manufacture and marketing of clinical diagnostic testing systems, principally automated chemistry analyzers and automated blood transfusion testing systems. Olympus's diagnostic systems business generated revenue of 52.7 billion yen in the most recent financial year ended March, 2008 and has consistently delivered stable profits. However, the presence of several large existing competitors, an increase in M&A activity and the entry in recent years of significant new players from other industries have created a new competitive environment in this market segment.
Taking into consideration the rapidly changing dynamics within this global market segment, Olympus determined that the divestment of its diagnostic systems business to Beckman, a major player in this segment, is the best strategic option and offers clear benefits going forward over retaining ownership and continuing to operate this business within the Olympus Group.
Listed on the New York Stock Exchange, Beckman is expanding in the areas of life science and clinical testing systems and has outstanding technology in the hematology, blood transfusion and immunoassay segments. Beckman generated revenue of about $3,098.9M (300.6 B JPY) and operating income of $298.6M (29.0 B JPY) in their most recent business year ended December 2008. Following the transfer of Olympus's diagnostic systems business, Beckman will become one of the top 3 global players in the chemistry market.
In addition to realizing a fair value for this business, Olympus also carefully considered this divestment from personnel, organizational and corporate culture perspectives. Olympus is confident that this agreement will expand the number of opportunities and range of possibilities for both this business and its employees.
Beckman Chairman, President and Chief Executive Officer, Mr. Scott Garrett, commented, "We are very excited about this agreement and are convinced that this combination of businesses will create a world leading company in clinical diagnostics with special strength in chemistry market." He added, "One of the best aspects of this transaction is the opportunity to combine the excellent and dedicated employees of Olympus into the Beckman family."
Outline of Divestment
The planned divestment of Olympus's diagnostic systems business to Beckman encompasses the entire business. Beckman has agreed to acquire the R&D, production and marketing functions of this business both in Japan and in international markets. Please see below for details:
- Olympus's Diagnostic Systems business division
- Mishima Olympus Co., Ltd. a wholly owned Olympus subsidiary responsible for domestic production of diagnostic systems; Olympus Medical Engineering Co., Ltd. a wholly owned Olympus subsidiary responsible for servicing operations of diagnostic systems.
- The diagnostic systems divisions of Olympus's overseas units.
The total value of the transaction is 77.5 billion yen. The specifics of the divestment process will conform to the local legal and regulatory jurisdictions in which each subsidiary operates. Beckman will pay the purchase price by a combination of cash and Beckman stock.
NOTE: Please refer to a separate regulatory disclosure titled "Notice Regarding Changes to the Status of Company Subsidiaries and Operations Subject to Divestment" for details of the parent operations and shares of newly created entities that are subject to divestment as part of this transaction.
Timeline of Divestment
February 27, 2009 (Fri) Signing of Master Purchase Agreement
July 1, 2009 (Wed) Target Closing Date
Impact on Earnings
Olympus expects any impact on its consolidated and non-consolidated business results for the current financial year ending March 31 to be minimal. Olympus anticipates this transaction to result in one-time profit in the next fiscal year starting April 1. Olympus will provide details of this gain and all necessary disclosures related to this transaction in a timely fashion.
Beckman Coulter, Inc. Profile
|NAME:||Beckman Coulter, Inc.|
|Date of Establishment:||1935|
|Listing:||Listed on New York Stock Exchange (NYSE: BEC)|
|Business Year-end:||December 31|
|Paid-in Capital:||$6.9M (as of December 31, 2008)|
|Consolidated Net Revenue:||$3.09B (for the year ended December 31, 2008)|
|Consolidated Total Assets:||$3.57B (as of December 31, 2008)|
|Chief Executive Officer:||Scott Garrett|
|Number of Employees:||Over 10,000 in 130 countries|
Recent Consolidated Operating Results: (Unit: Million US Dollars)
|For the year ended December 31, 2008|
|Profit for the year||194.0|
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