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Olympus sells camera division to private equity group

DonS

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The official press release follows.

News Release
Company: Olympus Corporation Yasuo Takeuchi, Director, Representative Executive Officer, President and CEO (Code: 7733, First Section, Tokyo Stock Exchange)
Company: Japan Industrial Partners, Inc. Hidemi Moue, CEO

Signing of Memorandum of Understanding for Divestiture of Imaging Business

Olympus Corporation (“Olympus”) and Japan Industrial Partners, Inc. (“JIP”) hereby announce that, today, the parties signed a memorandum of understanding to carveout Olympus’s Imaging business to a new company (“NewCo”) and subsequently transfer its shares to a fund managed, operated or otherwise handled by JIP (the “Transaction”).
After the due diligence and further discussions and negotiations, the parties are aiming to sign a legally- binding definitive agreement for the Transaction (the “Definitive Agreement”) by September 30, 2020. We will promptly make further announcement if any matters relating to the Transaction that needs further announcement occur.

1. Background and Purpose of the Transaction
Olympus’s Imaging business began with the manufacture and sale of a camera using the photographic
lens Zuiko in 1936. Through innovative technology and unique product development capabilities, Olympus has developed and launched various products, aiming to contribute to make people’s lives more fulfilling. Those products include: Olympus Pen, the innovative half-sized camera; Zuiko Pearlcorder, the world’s first micro-cassette tape recorder; and Olympus OM-D series, the mirrorless interchangeable lens camera.
Olympus has implemented measures to cope with the extremely severe digital camera market, due to, amongst others, rapid market shrink caused by the evolution of smartphones; Olympus has improved the cost structure by restructuring the manufacturing bases and focusing on high-value-added interchangeable lenses, aiming to rectify the earning structure to those that may continue generating profit even as sales dwindles. Despite all such efforts, Olympus’s Imaging business recorded operating losses for 3 consecutive fiscal years up to the term ended in March 2020.
Under such circumstances, Olympus considers that, by carving-out the Imaging business and by operating the business with JIP, the Imaging business’s corporate structure may become more compact, efficient and agile and it is the most appropriate way to realize its self-sustainable and continuous growth and to bring values to the users of our products as well as our employees working in the Imaging business. Olympus therefore has decided to sign the memorandum of understanding for the Transaction.


JIP has strong track records in supporting strategic carve-outs that realize growth potential and encourage autonomous growth. By adding support from JIP, the NewCo, as the successor of reputable brands such as “OM-D” and “ZUIKO,” will utilize the innovative technology and unique product development capabilities which have been developed within Olympus, and will realize continuous growth of the business by bringing better products and services to the users and customers and by making itself a productive and rewarding work place for its employees.


Imaging Business after the Transaction
NewCo will succeed and maintain the research and development functions and manufacturing functions globally as reformed under the contemplated structuring reforms to continue to offer high-quality, highly reliable products; and also continue to provide supports to the imaging solution products that have been distributed by Olympus.
Outline of the Transaction
The specifics of the Transaction shall be decided in the Definitive Agreement after careful examination and consultation between the parties. The parties currently consider the outline of the Transaction shall be as follows.
The parties will proceed with the actions and procedures for Transactions in full compliance with applicable laws including consultation obligations and other requirements under local employment laws.


Structuring Reform
Prior to the closing of the Transaction, Olympus plans to implement structuring reforms to the Imaging
business aiming to change the business structure of Imaging business to be more profitable and sustainable. We are currently investigating costs and other impacts of the structuring reform. If any future event which requires disclosure arises, Olympus will announce it promptly.
(1) Structure
(2) Signing of


Definitive Agreement
(3) Closing
: (i) Olympus’s Imaging business will be transferred to the NewCo by way of company split or otherwise, and then, (ii) shares in the NewCo will be transferred to a new company to be established by JIP.
: Scheduled to be signed by September 30, 2020
: Olympus and JIP strive to close the Transaction by December 31, 2020.
Contact:
Olympus Corporation, Investor Relations: TEL.03-3340-2111 Japan Industrial Partners, Inc.: TEL.03-6266-5781
 

DonS

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Now I am back to comment, I was too busy before work, now that I am "working" I have time :)

I think this is big news, but had been rumoured for so long. Olympus is one of the classics of Japanese cameras. What else does Olympus do other than cameras? (from Wikipedia)

Medical and surgical
Olympus manufactures endoscopic, ultrasound, electrocautery, endotherapy, and cleaning and disinfection equipment. The first flexible Endoscope in the world was co-developed and manufactured by Olympus in Tokyo.[11] Through its comprehensive product range and its reactivity to market innovations, Olympus enjoys a virtual stranglehold of the world market in gastro-intestinal endoscopes. It has roughly 70% share of the global market whose estimated valued at US$2.5 billion.[12] On 28 September 2012, Olympus and Sony announced that the two companies will establish a joint venture to develop new surgical endoscopes with 4K resolution (or higher) and 3D capability.

Scientific
Since the beginning, the company has been a manufacturer of microscopes and optics for specialised needs, such as medical use. The first microscope manufactured at Olympus was called the Asahi.[14] Currently, Olympus is a worldwide renowned manufacturer of microscopes. Olympus offers a complete range of microscopes, which covers applications from education and routine studies up to state of the art research imaging systems, both in life science and materials science.

Olympus Scientific Solutions Americas Corporation is a Waltham, Massachusetts-based manufacturer, and is a subsidiary of Olympus Corporation. One of its companies, for example, is Olympus Imaging and Measuring Systems, specializing in imaging instruments for testing and measurement during industrial inspections.

Industrial
Olympus manufactures and sells industrial scanners, flaw detectors, probes and transducers, thickness gages, digital cameras, image analysis software, industrial videoscopes, fiberscopes, light sources, XRF and XRD analyzers, and high-speed video cameras.
 

Taboo

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In other words, Olympus cam division is finished. If anyone thinks JIP can bring about what Olympus themselves couldn't and bring them back
to profitability then I think they're dreaming.
JIP has strong track records in supporting strategic carve-outs that realize growth potential and encourage autonomous growth
OM-D, Zuiko to be sold off to the highest bidder by JIP me thinks.
A shame really. Great product but nothing lasts if it don't make money.
 

SeanNeedham

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It's a sorry situation but Olympus but for a long while they put too much in to catering for an odd segment of the market that was somewhere above cell-phones and mainly concentrating on folk who perhaps wouldn't have bought even a base level SLR. That kerfuffle in 2011 probably didn't help matters much, and as Olympus has succumbed (I actually thought it'd be Pentax dropping off the perch before Olympus) what's going to be the state of play in the lower/mid tiers in the next few years.
It'll be interesting to see who goes shopping here and what happens going forwards.
 

rebel06

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Mj224

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Several months until the deal is signed, plenty of time for changes etc. Alas its the way of the world, my kit will almost certainly last me out. The lens pack is the major investment, so I guess Oly users will move towards Panasonic...:(
 

imagesBV

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.........in one way Olympus were ahead of their time in realizing a pro level system in a small form factor.
maybe they spent too much time on nurturing the retro and style conscious market with the plethora of Pen models...for which marketing appears trendy and often female focussed ......perhaps they could have used their resources better to propel OMDs into the hands of working Pros.

One thing is for sure....their Pen and OMD models will be remembered fondly....just like the film Pen and OM1 and OM10 and OM4ti etc......its a tragedy of the commercial world.......I still hope they can turn it around.
 

Mj224

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Yes agreed, still a few months until the sale goes through. Olympus several superb models on sale, plus a plethora of good lenses. They just can't go to the wall, can they? Hopefully, perhaps, we might hope a Chinese company might grab an opportunity, with less expensive manufacturing capability. And they maybe quite smart in R&D....

Cross fingers for a solution...……...
 
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