BREAKING: Olympus sells camera division

UPDATE: We reached out to Olympus, which has provided an official statement that appears below. 

In huge news within the camera industry, it has been announced that Olympus Corporation will be divesting its imaging business to a Japanese private equity fund. 

Olympus' camera division will be owned by Japan Industrial Partners (JIP), with an agreement expected to be finalized by 30 September 2020. 

According to 43 Rumors, JIP specializes in restructuring loss-making businesses to make them profitable before reselling them to "corporate acquirers" (such as purchasing Sony’s PC business, Vaio).

We spoke to Olympus, which is eager to stress to customers that it is very much business as usual, and that "this is the right step to preserve our brand’s legacy, the products, and the value of our technology". The company issued a full statement:

"Today the Olympus Imaging Business has signed a memorandum of understanding (MOU) with Japan Industrial Partners, Inc. (JIP). According to the MOU, both companies are entering into further discussions about the potential transfer of Olympus’ long-standing imaging business to JIP by the end of 2020.

JIP is a strong investment fund with a track record of success and has maximized the growth of many brands. JIP will use the innovative technologies and solid brand position of Olympus within the market, while also improving the profit structure of Olympus’ imaging business.

We understand you may have many questions, all of which we will work to answer in the upcoming weeks. We ask for your patience: we believe this is the right step to preserve our brand’s legacy, the products, and the value of our technology. Olympus sees this potential transfer as an opportunity to enable our imaging business to grow and delight both longtime and new photography enthusiasts. Olympus and JIP will continue discussions, and we are committed to providing full transparency about our intentions as the plans solidify.

We are grateful to all our customers for their loyalty and support for our products, and their passion for photography. During the ongoing discussions, Olympus Imaging will operate with business as usual: we will continue to work on innovative initiatives for our customers and we will launch new products as planned."

The official press release announcing the sale follows.

News Release
Company: Olympus Corporation Yasuo Takeuchi, Director, Representative Executive Officer, President and CEO (Code: 7733, First Section, Tokyo Stock Exchange)
Company: Japan Industrial Partners, Inc. Hidemi Moue, CEO

Signing of Memorandum of Understanding for Divestiture of Imaging Business

Olympus Corporation (“Olympus”) and Japan Industrial Partners, Inc. (“JIP”) hereby announce that, today, the parties signed a memorandum of understanding to carveout Olympus’s Imaging business to a new company (“NewCo”) and subsequently transfer its shares to a fund managed, operated or otherwise handled by JIP (the “Transaction”).
After the due diligence and further discussions and negotiations, the parties are aiming to sign a legally- binding definitive agreement for the Transaction (the “Definitive Agreement”) by September 30, 2020. We will promptly make further announcement if any matters relating to the Transaction that needs further announcement occur.

1. Background and Purpose of the Transaction
Olympus’s Imaging business began with the manufacture and sale of a camera using the photographic
lens Zuiko in 1936. Through innovative technology and unique product development capabilities, Olympus has developed and launched various products, aiming to contribute to make people’s lives more fulfilling. Those products include: Olympus Pen, the innovative half-sized camera; Zuiko Pearlcorder, the world’s first micro-cassette tape recorder; and Olympus OM-D series, the mirrorless interchangeable lens camera.
Olympus has implemented measures to cope with the extremely severe digital camera market, due to, amongst others, rapid market shrink caused by the evolution of smartphones; Olympus has improved the cost structure by restructuring the manufacturing bases and focusing on high-value-added interchangeable lenses, aiming to rectify the earning structure to those that may continue generating profit even as sales dwindles. Despite all such efforts, Olympus’s Imaging business recorded operating losses for 3 consecutive fiscal years up to the term ended in March 2020.
Under such circumstances, Olympus considers that, by carving-out the Imaging business and by operating the business with JIP, the Imaging business’s corporate structure may become more compact, efficient and agile and it is the most appropriate way to realize its self-sustainable and continuous growth and to bring values to the users of our products as well as our employees working in the Imaging business. Olympus therefore has decided to sign the memorandum of understanding for the Transaction.

JIP has strong track records in supporting strategic carve-outs that realize growth potential and encourage autonomous growth. By adding support from JIP, the NewCo, as the successor of reputable brands such as “OM-D” and “ZUIKO,” will utilize the innovative technology and unique product development capabilities which have been developed within Olympus, and will realize continuous growth of the business by bringing better products and services to the users and customers and by making itself a productive and rewarding work place for its employees.

Imaging Business after the Transaction
NewCo will succeed and maintain the research and development functions and manufacturing functions globally as reformed under the contemplated structuring reforms to continue to offer high-quality, highly reliable products; and also continue to provide supports to the imaging solution products that have been distributed by Olympus.
Outline of the Transaction
The specifics of the Transaction shall be decided in the Definitive Agreement after careful examination and consultation between the parties. The parties currently consider the outline of the Transaction shall be as follows.
The parties will proceed with the actions and procedures for Transactions in full compliance with applicable laws including consultation obligations and other requirements under local employment laws.

Structuring Reform
Prior to the closing of the Transaction, Olympus plans to implement structuring reforms to the Imaging
business aiming to change the business structure of Imaging business to be more profitable and sustainable. We are currently investigating costs and other impacts of the structuring reform. If any future event which requires disclosure arises, Olympus will announce it promptly.
(1) Structure
(2) Signing of

Definitive Agreement
(3) Closing
: (i) Olympus’s Imaging business will be transferred to the NewCo by way of company split or otherwise, and then, (ii) shares in the NewCo will be transferred to a new company to be established by JIP.
: Scheduled to be signed by September 30, 2020
: Olympus and JIP strive to close the Transaction by December 31, 2020.
Contact:
Olympus Corporation, Investor Relations: TEL.03-3340-2111 Japan Industrial Partners, Inc.: TEL.03-6266-5781

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