Olympus to acquire UK medical device maker Gyrus for $1.9 billion

Mumbai: Japanese camera and medical equipment company Olympus Corp will buy British medical instruments company Gyrus Group plc for $1.9 billion (¥211.7 billion), its biggest acquisition so far.

The acquisition, a move away from the normal Japanese way of organic growth, will help Olympus expand geographically and deepen its technological base.

Tokyo-based Olympus will pay 630 pence per Gyrus share, a 58 per cent premium to Gyrus'' 400 pence closing price of November 16.

The acquisition will enhance Olympus''s reach into North America, which accounts for 79 per cent of Gyrus'' revenue. Olympus, by contrast, has only 11 per cent of its sales in North America. The combined entity will generate revenues of over $3.4 billion.

Though Olympus is known more for its cameras, most of its revenue comes from medical businesses. It is a leading manufacturer of endoscopes, tiny cameras used in minimally invasive surgeries.

Based in Reading, England, Gyrus also makes endoscopes. Gyrus earned a net income of £13.2 billion on revenue of £213 million last year.

Olympus said it would fund the deal through a new debt facility from Sumitomo Mitsui Banking Corp. and existing cash resources.

Gyrus shareholders are expected to vote on the offer in mid-December, and the deal should be complete in the first half of 2008.