$370M bid by Olympus for the acquisition of Taewoong Medical

Olympus has made a $370M bid to acquire Taewoong Medical. 

An updated plan was highlighted by Olympus for the company’s medical device operations. The plan was to shift focus toward urological, respiratory, and gastrointestinal care, with a bigger investment in devices related to endoscopy for the improvement of treatment in those areas. Single-use endoscopy tools will be given special attention.

According to an announcement made by the company, Olympus has put $370M on the table in a bid to acquire GI stent manufacturer Taewoong Medical, which shows that the company is still on the same track as it was since the medical device operations plan was updated.

Taewoong Medical is a South-Korean company that makes various endoscopic devices to be used for gastrointestinal procedures. The announcement consisted mostly of Olympus focusing on its extensive range of metallic GI stents that are used in procedures that are minimally invasive, to open up a blocked duodenum, esophagus, biliary tract, or colon. It can also be used if the aforementioned parts are narrowed down due to various possible conditions.

In more than 30 years that the company has existed, its CEO Kyong-min Shin said that the company has made “a robust market presence in Korea, Japan, and Europe, and exports to 86 countries worldwide.” Olympus’ global head of the therapeutic solutions division, Gabriela Kaynor stated that bringing Taewoong under the Olympus umbrella is expected to have an instant impact on the company’s GI market position, which is already strong, to say the least.

According to the acquisition terms, Olympus will pay $255.5M in cash to Taewoong as soon as the deal is closed. After deal closure, the remaining $114.5M will be paid when Taewoong reaches certain milestones. The price tag of $370M has a significant premium attached to it over the annual earnings of Taewoong. According to Olympus, the Korean company had $49.8B in annual sales in 2021 with an operating income of almost $9.9M.

Upon the conclusion of the acquisition, the portfolio of Taewoong will become part of Olympus’s therapeutic solutions section. This section has reported the most recent revenue of nearly $2B in mid-2022.

Olympus has had acquisitions recently that fall in the 2019 plan category. Towards the end of 2020, $340M was spent to acquire Veran Medical Technologies and its technology, including cancer biopsy systems and high-tech bronchoscopes. The company was able to put its own single-use bronchoscopes on the market soon after the conclusion of the buyout. In 2021 Olympus acquired Quest Photonic Devices, a surgical endoscopy company for a sum amounting to €50M as well as Medi-Tate, for an unrevealed amount.

Last year after purchasing Odin Vision, an endoscopy software maker for about $79M, Olympus kept on thinning its businesses by letting go of its scientific solutions business and shifting focus entirely to therapeutic and endoscopic businesses. In late August 2022, Bain Capital Private Equity decided to purchase the scientific solutions business for $3.1B. The business is aimed at X-ray fluorescence analyzers, life science, industrial customers, and some other testing apparatuses.

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