Japan Industrial Partners buys Olympus’ mobile telecom unit
Japan Industrial Partners (JIP), a Tokyo-based private equity firm specializing in business restructuring, has bought the mobile-phone retailing business run by Olympus Corp’s ITX unit for JPY53 billion ($676 million).
The deal, which will be completed on September 28, is designed to maximize value for Olympus shareholders by aligning the business with JIP's expertise and capital. Olympus was attracted to the private equity firm due to its experience in helping subsidiary companies go independent and parent companies divest themselves of businesses.
ITX's information and communication business, which focuses on selling mobile terminal devices such as mobile phones, generated net sales of JPY229.4 billion and operating income of JPY5.3 billion for the year to March 2012.
The proceeds from the sale are sorely needed by Olympus. The struggling camera manufacturer saw its stock fall 59% last year after it admitted to an accounting fraud that facilitated the cover-up of $1.7 billion in losses. The company inflated fees paid to advisers regarding the $2.1 billion acquisition of Gyrus Group in 2008, as well as overpaying for three Japanese companies.
It sued 19 current and former officials over the fraud, including Tsuyoshi Kikuwaka, the former chairman, and was forced to restate more than five years of earnings last December in order to avoid having its shares delisted from the Tokyo Stock Exchange. It was the fifth-worst performer on the Nikkei 225 Stock Average in 2011.
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