Japan Industrial Partners to buy Olympus' imaging division

The size of the transaction was not disclosed. Olympus said in a filing that the divestment would result in the imaging division's corporate structure becoming more compact and efficient. This is seen as the best way to make it self-sustainable and deliver growth.

Olympus started selling the Zuiko camera lens in 1936. It went on to introduce products such as the Olympus Pen half-size camera, the world's first micro-cassette tape recorder camera, and the Olympus OM-D mirrorless interchangeable lens camera. However, the business has struggled in recent years with the rise of smart phones and consequent fall in demand for digital cameras.

Olympus responded by restructuring its manufacturing operations and focusing on high-value interchangeable lenses but to no avail. The imaging division generated JPY43.6 billion ($407 million) in revenue for the 12 months ended March, down from JPY48.7 billion in 2019. The operating loss shrank from JPY18.3 billion to JPY10.4 billion, largely due to the absence of restructuring expenses.

The division remains non-core, accounting for 6.1% of Olympus' overall revenue in the 2020 financial year. The company posted increases in revenue and net profit for the period, but forecasts were missed due to COVID-19. It has postponed announcing forecasts for 2021. Olympus noted that the slowdown had been sharper for imaging than for its other business units and it would take time for end-consumer demand to rebound.

This is not the first Japan PE investment in imaging. In 2012, Advantage Partners agreed to buy Sanyo Electric's digital camera business from Panasonic, paying just $1 million in equity due to accompanying pension and trade liabilities. Revenue had nearly halved in the preceding years. The company ended up concentrating on more specialized and profitable applications – professional photography, security, and sports – and was sold to Japan Asia Holdings for JPY2.5 billion in 2018.

JIP was established in 2002 with a mandate to support the revitalization of Japanese companies, primarily by carving out assets from large players and straight restructurings of mid-size businesses. The firm is currently deploying its fifth fund, which closed in 2018 at JPY148.5 billion, including a JPY46.2 billion co-investment vehicle. Recent deals include two copper tubing carve-outs and the purchase of electronics supplier Nippon Avionics from NEC Corporation.

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• Topics
• North Asia
• Buyouts
• Technology
• Japan
• manufacturing
• Japan Industrial Partners