By Jof Enriquez,
Follow me on Twitter @jofenriq
Looking to expand into the medical technology sector, Japanese camera and optics company Nikon recently announced a takeover of UK-based retinal imaging firm Optos in a deal worth 259.3 million pounds, or approximately $400 million.
According to a recent press release, Nikon is offering $5.24 in cash for each Optos share. That represents a 30.5% premium to the closing price of $4.02 per Optos share on February 26, 2015. The offer will be fully endorsed by Optos’ directors to shareholders. Both companies anticipate the deal to close by the second quarter of this year after court and anti-trust approvals are received.
“I am pleased to announce this strategically important transaction for Optos and Nikon,” Kazuo Ushida, president of Nikon, said in the statement. “I am confident that an Optos/Nikon combination would create a world class ‘retina’ player and would significantly benefit our respective stakeholders. Together, we will pursue various collaboration opportunities and further expand the medical business in the future.”
Known for its cameras, Nikon said that acquiring Optos is in line with its plans “to enter the medical sector to leverage its optical technologies and know-how into the medical industry.”
Nikon said that it wants to combine Optos’ retinal imaging technology with its expertise in optics to build a scalable platform for its new medical business. The company cited Optos’ strong portfolio and leading position in the retinal diagnostics imaging market.
“In particular, Optos’ ultra-widefield technology provides digital images of approximately 82 percent of the entire retina of the eye in a single patient-friendly capture, which enables optometrists and ophthalmologists to reduce the amount of time required for retinal diagnostics and to enhance patient care,” the press release said.
According to Reuters, Optos is the market leader in retinal imaging by sales, with a share of just over 30 percent. However, 72 percent of sales are generated in North America. Nikon’s reach will help the business to grow in other parts of the world.
“Nikon is strong globally, while our business is strong in North America, so there are good growth opportunities in both Europe and Asia,” Optos CEO Roy Davis told Reuters.
Headquartered in Scotland, Optos generated revenue of approximately $170.6 million for the year ended September 30, 2014, and operating profit of about $16.3 million in the same period.
Dr. Peter Fellner, chairman of Optos, added in the release that following the takeover, “Optos will become a key part of Nikon’s future strategy to develop a global medical business and will continue to provide its market leading solutions to the patients we serve.”
Approximately 285 million people worldwide are visually impaired, according to WHO statistics cited by Nikon. That number is expected to rise further as the incidence of age-related blindness also increases. A spike in diabetes-related eye complications is also expected to strengthen the demand for retinal imaging.