C.R. Bard Takes Full Ownership Of Medicon After $93.2 Million Buyout
By Jof Enriquez,
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New Jersey-based medical device company C.R. Bard announced that it is taking full ownership of Japan-based Medicon after buying out the 50 percent stake of its long-term joint venture partner Kobayashi Pharmaceutical Co. The deal, already approved by the boards of directors of both companies, will make Medicon a wholly-owned subsidiary of Bard.
The buyout is worth a total 11.2 billion yen ($93.24 million), and will close by early November, according to a report from the Wall Street Journal. The deal includes annual payments by Bard to Kobayashi through 2025. Bard says the sale will add about $40 million to its 2016 net sales, and reduce adjusted earnings per share by about five cents for the fourth quarter of 2015 and 20 cents for fiscal year 2016.
By buying out its long-time partner, Bard states it wants to strengthen its presence and adjust to the changing dynamics in the Japanese healthcare market — the third-largest in the world, behind the United States and Europe.
“As the growth opportunities in Japan evolve, we believe it is time to enhance our presence in the third-largest healthcare market in the world,” Timothy M. Ring, chairman and CEO, C.R. Bard, said in a press release. “We want to thank our partners at Kobayashi for the more than 40 years of cooperation in building this business together, and we look forward to welcoming the Medicon team as full members of the Bard family.”
Upon closing of the transaction, Medicon — a producer and distributor of medical equipment, devices, and supplies in the urology, gastrointestinal, vascular, and oncology segments for the Japanese market — will become a wholly-owned subsidiary of Bard.
Bard and Kobayashi had co-owned and operated Medicon since 1972. Although the joint venture was beneficial for both partners for more than 40 years, Bard said in the announcement that "the future growth opportunities in Japan will come from market segments that are more clinically differentiated, including peripheral vascular and vascular access. Therefore, the company believes that now is the time to take a more direct role with clinicians and patients in Japan."
According to Export.gov, Japan currently is the most important export destination for American medical devices, with approximately $5 billion worth of devices and supplies sold annually. Historically, American firms have had a strong presence in the country, accounting for one-quarter of the local medical device market.