Panasonic is trying to get out of the medical device business, and the latest round of bids for its billion-dollar-plus healthcare unit has attracted private equity giants KKR and Bain Capital to a list of suitors that already includes Toshiba and TPG Capital, Reuters reports.
The final bids are due next week, and Reuters' sources say the final price tag could come in as high as $1.5 billion, above the $978 million rumored back in May. Panasonic plans to whittle down its list of potential buyers and enter exclusive negotiations with a bidder by next month, according to the news service.
For the private equity outfits, buying Panasonic's medical business could be a first step toward cashing out with an IPO in the recently hot market for life sciences companies. KKR, fresh off spending more than $1 billion on two CROs, is more than well acquainted with the industry. Toshiba, on the other hand, could use Panasonic's ultrasound devices, blood glucose monitors and pain-relief laser treatments as it faces global pressures for its consumer electronics.
Panasonic plans to spend about $25 million on restructuring over the next two years, and cashing out of healthcare would give the tech giant some room to breathe as it looks to reverse the fortunes of its TV and semiconductor businesses.
The company's move to cleave off its still-profitable medical arm stands in contrast to fellow struggling Japanese giants Sony ($SNE) and Olympus ($OCPNY), which are banding together to sell endoscopes and imaging technologies around the world, hoping the growing markets for medical technology will dull the blow of declining demand for consumer products.
- read the Reuters story