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Business

Orix to buy medical device company

TOKYO -- Orix will acquire a Tokyo medical equipment sales company for just over 5 billion yen ($42.1 million), part of efforts to expand in this area through multiple acquisitions.

     An announcement is expected Friday.

     Orix will purchase all shares of Innomedics Medical Instruments before transferring a portion of the stock to the new management team. Orix will dispatch several directors, but the current president will stay on to maintain management independence.

     Innomedics ranks about 10th place in its industry with sales of around 50 billion yen. It has experience in selling to large hospitals and boasts industry-leading sales in Tokyo and neighboring Chiba Prefecture.

     Orix plans to make additional acquisitions as well, eventually forming a new holding company and placing Innomedics and subsequent acquisitions under its umbrella. It hopes to create a sales group that is among the top three in the industry. Eventually, Orix will list the holding company, or sell it to a rival.

     Japan's medical device sales sector, crowded with companies from small to large, is primed for realignment. Smaller businesses lack the power to negotiate prices with manufacturers and are often forced to procure at high prices.

     (Nikkei)

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