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KKR agrees 80% Panasonic Healthcare buyout in $1.67bn deal

27 Sep 2013

Panasonic HealthcareUS private equity firm KKR has agreed to buy 80 per cent of Japanese electronic group Panasonic’s healthcare division for JPY165bn ($1.67bn).

Panasonic will hold the remaining 20 per cent of the newly formed PHC Holdings Ltd and will work with KKR to manage the business according to a statement from the firm.

KKR was granted preferential rights to buy Panasonic in August, five months after it was first reported Panasonic was looking to sell off the asset.

A consortium led by Bain Capital was thought to have entered the race at the beginning of last month, with the competition leading Panasonic to eye about $1.5bn for the business.

Panasonic healthcare has three core businesses – In Vitro Diagnostics, Medicom and Biomedical, focusing respectively on blood glucose and diabetes monitors, electronic health record and IT systems and biomedical laboratory equipment.

KKR co-founder and co-CEO Henry Kravis said, “Panasonic Healthcare has excellent market positions and high-level technical capabilities, and we believe it has significant growth potential.

“Panasonic Healthcare’s experienced management team and employees, our equity partner Panasonic, and KKR all share a common goal of working together as partners over the long term to support further growth of Panasonic Healthcare.

“Japan is a very important and attractive market for KKR, and our experienced team on the ground in Japan looks forward to leveraging KKR’s global expertise and experience to make this a highly successful partnership.”

KKR said in July it planned to deploy a significant part of its recently closed $6bn Asian fund in Japan.

Chief executive of KKR Japan Hirofumi Hirano said the firm would target Japanese companies whose bonds have been rated as junk, according to Reuters.

He added that the firm will restructure and provide equity to companies that have the potential to recover.

KKR will concentrate on mid-market companies based both in and outside of Tokyo, which Hirano said were the most popular buyout targets in the country.

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