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Business deals

Fujifilm bolsters biomedical business with twin acquisitions

Office machine maker to spend $800m for two cell culture media developers

Fujifilm Chairman and CEO Shigetaka Komori

TOKYO -- Fujifilm Holdings will purchase a pair of players in regenerative medicine, raising its bet on health care as the company's next core income earner amid the ever-shrinking market for copiers and printers.

The Japanese multinational said Thursday that it will buy U.S. company Irvine Scientific Sales and IS Japan of Saitama Prefecture from Japanese oil and metals conglomerate JXTG Holdings for around $800 million, acquiring all outstanding shares of the two businesses over the May-June period.

"We're aiming to become a total health care company providing preventive, diagnosis and treatment services," Fujifilm Chairman and CEO Shigetaka Komori told reporters in Tokyo.

Both Irvine Scientific and IS Japan develop cell culture media, a substance that contains nutrients for growing cells. It is essential in culturing cells for regenerative medicine, including induced pluripotent stem cells, or iPS cells. The market offers prospects of roughly 10% annual growth. The two companies carry an operating margin near 20% and boast expertise in products customized to the needs of individual customers.

Fujifilm already possesses a small presence in the culture media business. Wako Pure Chemical Industries, a Japanese player acquired in 2017, generates slightly more than 4 billion yen ($37.6 million) in relevant sales.

By adding Irvine Scientific and IS Japan -- leading players in the global cell culture media market along with Germany's Merck -- Fujifilm has taken another step toward bolstering its biotechnology business.

"From the standpoint of Fujifilm's strategy to position the health care business as a key income generator, we give a thumbs-up to the double acquisitions," an industry analyst said.

Fujifilm entered into health care when it bought Toyama Chemical in 2008. This field generates only about 20% of Fujifilm's sales today, but Komori said the company aims for 30% to 40% down the road. Fujifilm likely will target health care-related companies with the majority of its 500 billion yen budget for acquisitions under a three-year business plan through fiscal 2019. Recent purchases in the business include a 2015 deal for Cellular Dynamics International, a U.S. developer and producer of iPS cells. 

In its current mainstay business of office automation equipment, Fujifilm recently announced plans to take over U.S. partner Xerox. But fierce opposition from outspoken Xerox shareholders might block the deal.

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