Canon in exclusive negotiations to acquire Toshiba Medical Systems for $6B

Infinix-i X-ray angiography system--Courtesy of Toshiba

Canon ($CAJ) has emerged as the exclusive bidder for Toshiba Medical Systems, beating out Fujifilm Holdings in the final round of discussions, and numerous others who were also reportedly interested, including Sony ($SNE), Konica Minolta and private equity players KKR, Bain Capital, the Carlyle Group and the U.K.'s Permira.

Canon will have exclusive negotiating rights until March 18, during which the two sides will aim to hammer out the details of a final agreement, expected to be valued around ¥700 billion ($6 billion).

"Toshiba has carried out a close evaluation of the overall proposals received from companies that expressed an interest in acquiring TMSC (Toshiba Medical Systems Corp.), including their appraisal of TMSC's value and the feasibility of successfully completing the transaction, and determined that the proposal from Canon Inc. is superior to that of the other companies," the company said in a statement.

With net sales of ¥412.5 billion ($3.66 billion) and revenues of ¥23.9 billion ($198.9 million), Toshiba's healthcare business, consisting primarily of imaging devices (including CT, MRI, X-ray and ultrasound machines) is one of the few profitable elements of the struggling conglomerate.

According to a Japanese business news outlet, Toshiba leads the Japanese market with a 30% share, and is fourth worldwide (behind GE ($GE), Philips ($PHG) and Siemens), with a global market share of 10%.

Toshiba is aiming to net $6 billion from the eventual sale as it seeks to recover from a devastating accounting scandal. It has forecasted a ¥550 billion ($4.6 billion) annual loss due in part to restructuring costs.

The company originally said it was putting at least 51% of Toshiba Medical Systems up for sale, but last month said it wanted to sell the entire stake, according to The Wall Street Journal reporting.

Canon's medical device offerings include radiography devices, mobile X-ray machines, fluoroscopy devices and optical coherence tomography equipment for eye care, according to the company website.

- read the release (PDF)

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