Bain agrees $3b carve-out from Japan's Olympus

This is the private equity firm’s seventh announced or completed carve-out of a Japan-based business. An eighth is pending, with a Bain-led consortium having launched a JPY 816.8bn tender offer for Hitachi Metals, after agreeing to buy Hitachi’s majority stake in the business. The firm is also known for leading a JPY 2trn acquisition of Toshiba’s flash memory division.

Olympus has previously demonstrated a willingness to offload non-core assets to private equity buyers. This is its fifth divestment in the past 10 years, following deals involving mobile devices business ITX Corporation, e-commerce payments player Net Protections Holdings, business services platform Nippon Outsourcing, and its imaging division.

The conglomerate said in a filing that the sale of Evident, its scientific solutions division, was driven by a desire to focus on global competitiveness in other areas of medical devices, notably endoscopic and therapeutic solutions.

Evident supplies microscopes to life sciences users for academic and clinical research purposes, pathology diagnostic services, drug discovery, and fertility treatments. Its industrials client base, meanwhile, sources microscopes used in semiconductor and electronic components manufacturing, videoscopes and fiberscopes, non-destructive testing equipment, and x-ray fluorescence analysers.

Sales for the 12 months ended March came to JPY 119.1bn, while operating income reached JPY 17.5bn. Olympus added that, under Bain’s ownership, Evident could develop its business with more agile and flexible decision-making, leading to further growth and product development.

“Bain Capital has a deep understanding of Evident's business value and growth potential. Importantly, they highly appreciate Evident's corporate culture, which has been a valuable asset to Olympus in fulfilling a diverse spectrum of customer needs through the global collaboration and proactive commercialisation of cutting-edge technologies,” said Yasuo Takeuchi, president and CEO of Olympus.

This is the second large-cap corporate carve-out announced in Japan in the past four months, following KKR’s agreement to acquire Hitachi’s controlling stake in Hitachi Transport Systems, which trigged a JPY 749.5bn tender offer for the listed logistics business.

A sale process is also underway for Toshiba – the parent entity rather than one of its divisions – as the beleaguered conglomerate looks for ways to address structural and governance issues. In April, Effissimo Capital Management, an activist investor that owns about 9.9% of the company, said it would sell to Bain should the private equity firm submit an offer that receives regulatory approval.

Bain recently launched its fifth Asia-focused private equity fund with a target of USD 5bn.

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