|Toshiba's Tokyo headquarters--Courtesy of Toshiba|
Long-beleaguered Toshiba is planning on selling its entire medical equipment unit as it grapples with rising restructuring costs. The move comes as the Japanese company attempts to recover from an accounting scandal that has taken a hefty toll on business.
Toshiba had previously said it would sell at least 51% of the medical unit.
The sale of the entire unit could fetch between ¥400 billion to ¥500 billion ($3.5 billion to $4.4 billion). But a deal could reach ¥650 billion as companies look for medical device businesses with strong growth prospects, people familiar with the matter told Reuters. Toshiba Medical generates more than $3 billion in annual sales.
Global buyout firm KKR and Japanese imaging companies including Canon ($CAJ), Fujifilm and Konica Minolta have made it to the second round of bidding. Buyout funds Carlyle Group and Bain Capital did not fare as well, losing out after the first round of bidding, according to the Reuters story.
The deadline for second round bids is Friday. Toshiba and all shortlisted parties declined to comment to the news outlet about a potential deal.
A sale comes at a critical moment for Toshiba. The Tokyo-based company has suffered after an accounting scandal in 2009, which accused the company of overstating profits. Toshiba's stock has since lost about 65% of its value and CEO Masashi Muromachi has turned to restructuring as a result.
In December, Toshiba said that it would lay off 6,800 employees to lighten its load. The company also forecast a record ¥550 billion loss for the fiscal year ending in March 2015. Now Toshiba is expecting that loss to be even wider at ¥710 billion, Reuters reports.
Whoever gets their hands on the company's medical equipment business will inherit a suite of products including imaging devices for CT scans, MRIs, ultrasounds and X-rays. Toshiba Medical brought in ¥405.6 billion for the financial year ending in March 2015.
- read the Reuters story