The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to Panasonic Corp. the Japanese electronics-manufacturing giant.
The electronics manufacturer is reportedly close to agreement with the private equity and venture capital firm KKR & Co., to sell a majority holding of some 80 percent of its medical supply division Panasonic Healthcare Co. in a deal valued at $1.5 billion. Reports also indicate that the parent company will retain the remaining 20 percent of the transferred asset shares as part of a long-term arrangement.
Panasonic Healthcare Co., which is a leading supplier of electronic medical equipment utilized by hospitals and other healthcare providers worldwide, including products from the high end of medical imaging technology to the relatively low-tech equipment employed in large scale catering operations like those situated at major hospitals. The decision comes at a time that the company’s parent Panasonic Corp., seeks to address falling profitability in its day to day electronics industry.
“While both Panasonic Healthcare and the parent company are doing well overall, the decision has been made to begin the restructuring efforts in the consumer electronics division of the company. Anytime a major reorganization takes place in a company the size of Panasonic, considerable costs are incurred. A potential sell off just one of its well performing assets would go a long way to covering not only the costs of such restructuring, but also ensures that investor confidence remains consistent,” said Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.
The proposed sales returns would be expected to cover around 60 percent of Panasonic Corp’s estimated restructuring efforts without the company relying on outside lines of credit. Despite its admitted shortcomings in costs at its consumer-electronics division Panasonic has had a remarkably well performing year from the markets perspective with its return on investment standing at 85.61 percent for the year to date.
“No one should make any assumptions based on this deal being certain just yet, that said however, there is definitely a lot of interest in the potential benefits such a deal would bring to the shareholders in both companies, and plans are of course being made to act upon as the situation becomes more concrete. At this stage our outlook is that the only outcome should be positive, but decisions on investment will only be made with all the facts in hand,” concluded Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.
The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.
