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Olympus Imaging Business To Be Sold To JIP Inc
  • EnoEno

    https://www.ephotozine.com/article/breaking-news---olympus-imaging-business-to-be-sold-to-jip-inc-34806

    Due to continued losses in the Imaging Division, Olympus Imaging Business is due to be sold to JIP Inc, in order to separate the imaging division. Olympus cameras and lenses will continue to be manufactured.

    From Olympus: June 24, 2020 - Signing of Memorandum of Understanding for Divestiture of Imaging Business

    Olympus Corporation ("Olympus") and Japan Industrial Partners, Inc. ("JIP") hereby announce that, today, the parties signed a memorandum of understanding to carveout Olympus’s Imaging business to a new company (“NewCo”) and subsequently transfer its shares to a fund managed, operated or otherwise handled by JIP (the "Transaction").

    After the due diligence and further discussions and negotiations, the parties are aiming to sign a legally-binding definitive agreement for the Transaction (the "Definitive Agreement") by September 30, 2020. We will promptly make further announcement if any matters relating to the Transaction that needs further announcement occur.

    1. Background and Purpose of the Transaction

    Olympus's Imaging business began with the manufacture and sale of a camera using the photographic lens Zuiko in 1936. Through innovative technology and unique product development capabilities, Olympus has developed and launched various products, aiming to contribute to make people’s lives more fulfilling. Those products include: Olympus Pen, the innovative half-sized camera; Zuiko Pearlcorder, the world's first micro-cassette tape recorder; and Olympus OM-D series, the mirrorless interchangeable lens camera.

    Olympus has implemented measures to cope with the extremely severe digital camera market, due to, amongst others, rapid market shrink caused by the evolution of smartphones; Olympus has improved the cost structure by restructuring the manufacturing bases and focusing on high-value-added interchangeable lenses, aiming to rectify the earning structure to those that may continue generating profit even as sales dwindles. Despite all such efforts, Olympus’s Imaging business recorded operating losses for 3 consecutive fiscal years up to the term ended in March 2020.

    Under such circumstances, Olympus considers that, by carving-out the Imaging business and by operating the business with JIP, the Imaging business’s corporate structure may become more compact, efficient and agile and it is the most appropriate way to realize its self-sustainable and continuous growth and to bring values to the users of our products as well as our employees working in the Imaging business. Olympus therefore has decided to sign the memorandum of understanding for the Transaction.

    JIP has strong track records in supporting strategic carve-outs that realize growth potential and encourage autonomous growth. By adding support from JIP, the NewCo, as the successor of reputable brands such as “OM-D” and “ZUIKO,” will utilize the innovative technology and unique product development capabilities which have been developed within Olympus, and will realize continuous growth of the business by bringing better products and services to the users and customers and by making itself a productive and rewarding work place for its employees.

    Imaging Business after the Transaction

    NewCo will succeed and maintain the research and development functions and manufacturing functions globally as reformed under the contemplated structuring reforms to continue to offer high-quality, highly reliable products; and also continue to provide supports to the imaging solution products that have been distributed by Olympus.

    Outline of the Transaction

    The specifics of the Transaction shall be decided in the Definitive Agreement after careful examination and consultation between the parties. The parties currently consider the outline of the Transaction shall be as follows.

    The parties will proceed with the actions and procedures for Transactions in full compliance with applicable laws including consultation obligations and other requirements under local employment laws.

    1. Structure: (i) Olympus’s Imaging business will be transferred to the NewCo by way of company split or otherwise, and then, (ii) shares in the NewCo will be transferred to a new company to be established by JIP.
    2. Signing of Definitive Agreement: Scheduled to be signed by September 30, 2020
    3. Closing: Olympus and JIP strive to close the Transaction by December 31, 2020.
    4. Structuring Reform

    Prior to the closing of the Transaction, Olympus plans to implement structuring reforms to the Imaging business aiming to change the business structure of Imaging business to be more profitable and sustainable.

    We are currently investigating costs and other impacts of the structuring reform. If any future event which requires disclosure arises, Olympus will announce it promptly.

  • 50 Replies sorted by
  • Vitaliy_KiselevVitaliy_Kiselev

    Someone had been right.

  • EnoEno

    @Vitaliy_Kiselev

    Indeed you were right!

  • garroulusgarroulus

    @Vitaliy_Kiselev

    Indeed maybe we should pay more attention to your insights.

  • Vitaliy_KiselevVitaliy_Kiselev

    Statement from Akihiko Murata, President, Olympus America Inc., Consumer Products Group

    As you are aware, the Imaging industry has experienced marked declines for several consecutive years. The market is contracting as the smartphone industry grows, and competition has been steadily increasing in the mirrorless interchangeable lens camera segment.

    Due to these long term trends as well as recent market contractions due to COVID-19, the Olympus Imaging Business Unit has signed a memorandum of understanding (MOU) with Japan Industrial Partners, Inc. (JIP). According to the MOU, both companies are entering into further discussions about the potential transfer of Olympus’ long-standing Imaging business to JIP by the end of 2020.

    During these discussions, Olympus Imaging will operate business as usual and will continue to deliver innovations to our customers, launching new products as planned. Olympus and JIP are committed to providing our stakeholders full transparency about our intentions as plans solidify.

    Actually this statement clearly tell you that as soon as discussions will end it'll be all done for Olympus cameras and lenses.

    As far as I talked no one seriously plan now good sales of new rehashed cameras or lenses. As people will flee. And it is very few people left who can do it good.

  • EspenBEspenB

  • EspenBEspenB

  • EspenBEspenB

  • EspenBEspenB

    Visionary to the end.

  • Vitaliy_KiselevVitaliy_Kiselev

    JIP has been acquiring insolvent businesses in Japan since 2002, including one from Olympus before, Olympus mobile phone business. JIP is not a large pocket investor, it's a small (US$150m) equity investment partner

    Absolutely no development or new producs are expected. But some Chinese firms could buy Zuiko brand and also do 1-2 m43 cheap cameras without mechanical shutters.

    One Japanese guy I talked explained it such - such procedure allows Japanese top managers who actually destroyed their departments to "save face", they also let new company to fire all long time workers in very bad fasion.

  • Vitaliy_KiselevVitaliy_Kiselev

    Andrew

    Arguably if Olympus had been smaller and more focused on their loyal enthusiasts from the start, the business would have been more sustainable in the long term. In being a large corporation at the beck and call of demanding shareholders, invested deeply in the consumer camera market aiming for volume, things do go very downhill eventually as disruptive technology comes along.

    Actually it is tight team between such "experts" and ambassadors and top management who killed the company.

    No modern digital camera company can be "small" and "focused on their loyal enthusiasts". Saying otherwise show basic lack of economics and electronics design knowledge.

    In short - this guys, who proposed this to olympus for years, are idiots.

  • Vitaliy_KiselevVitaliy_Kiselev

    Olympus UK, one of the last PRs made by few remaining people in all EU

    Today the Olympus Imaging Business has signed a memorandum of understanding (MOU) with Japan Industrial Partners, Inc. (JIP). According to the MOU, both companies are entering into further discussions about the potential transfer of Olympus’ long-standing imaging business to JIP by the end of 2020.

    JIP is a strong investment fund with a track record of success and has maximised the growth of many brands. JIP will use the innovative technologies and solid brand position of Olympus within the market, while also improving the profit structure of Olympus’s imaging business.

    We understand you may have many questions, all of which we will work to answer in the upcoming weeks. We ask for your patience: we believe this is the right step to preserve our brand’s legacy, the products, and the value of our technology. Olympus sees this potential transfer as an opportunity to enable our imaging business to grow and delight both longtime and new photography enthusiasts. Olympus and JIP will continue discussions, and we are committed to providing full transparency about our intentions as the plans solidify.

    We are grateful to all our customers for their loyalty and support for our products, and their passion for photography. During the ongoing discussions, Olympus Imaging will operate with business as usual: we will continue to work on innovative initiatives for our customers and we will launch new products as planned.

  • EspenBEspenB

    https://www.dpreview.com/forums/post/64075472

    JIP is worth DUS150 million.

    YOY Olympus Imaging (it’s camera wing) is losing US$156 million.

    JIP specializes in taking underperforming assets and parsing the out. They are not a turnaround company. In Japan, it is extremely expensive to downsize employees and pensions and salaries. So companies like JIP exist to take assets and sell them apart from those obligations.

    In the last 5 years JIP has sold off assets of over 14 companies. Not one has it ever restructured or continued development. It’s doesn’t have the capital. JIP exists solely to manage brands for the benefit of shared agreements with shareholders. That’s why VAIO is 10% owned by Sony and why JIP outsources all design and manufacture to Chinese parts bin suppliers for components. JIP has no R&D, no internal development, no engineers, nothing. They are accountants.

    They are a vulture fund of privately owned equity partners designed to get around Japanese pension, retention, and servicing laws.

    This is very bad news for the Olympus brand and it’s invested customers. The Japanese news is all over this as well because JIP is notorious for Chinese outsourcing at a time when it is official domestic policy to onshore key industries. This is another example of Olympus having a tin ear.

    In Japan apparently most external sales staff (non-Japanese) have been let go. This started months ago. Most of the software, design, and optical engineers have left or are moving to the medical imaging. Overseas assembly plants are being quietly shopped for real estate value alone. The glazing kilns are shutting down for consumer imaging. The company is preparing to only sell from inventory. New products are technically on hold until Olympus figures out how much to pay JIP to take these losses off their hands. Olympus Visionaries in some countries have already been told they must stick to NDAs and there is no marketing budget nor equipment available.

    That’s right. The news out of Japan is that this is NOT a sale, but a divestment at loss. Olympus will have to pay JIP to take imaging, basically giving them the consumer patent portfolio in exchange. The reason for the press release is Olympus has to divulge now that it will be paying cash for JIP to take the assets. That warns shareholders. This was. OT a bout the loyal consumer. Anyone who thinks this is a deep pockets investor seeking a new product line, or this is an “under new management” improvement needs to know exactly what JIP is as a company. They exist to help Olympus get rid of their consumer Imaging portfolio entirely.

    Likely this is the end of Olympus and Zuiko. The Japanese inside information is much more revealing than the web-based stories in English media. You have to go to the accounting and engineering boards in Japan to hear the dirt.

  • EspenBEspenB

    https://www.dpreview.com/forums/post/64075758

    Hoping that Olympus Camera will come up with lots of new and exciting developments, as some have voiced here, is wishful thinking. It will be a slow (or perhaps in the current state of the market a rather fast) decline to death. If you are heavily invested in the system and you rely on the resale value of your equipment to buy new ones, I would get out asap. However, if you just enjoy the system in its current state, and you don't care about the resale value, I would look for good deals to compliment your current equipment, but I would steer clear of problematic equipment that might need a lot of service (e,g, 14-42 EZ lens with its problematic zoom mechanism, E-M5 III with it breaking of the bottom plate etc...)

  • Vitaliy_KiselevVitaliy_Kiselev

    Likely this is the end of Olympus and Zuiko. The Japanese inside information is much more revealing than the web-based stories in English media. You have to go to the accounting and engineering boards in Japan to hear the dirt.

    I told it already also.

    No one at Olympus though that life will be same or improve for long time.

    All ambassadors and managers lies had been to allow existing stock to sell at better prices.

    Good news for m43 users is that we can see nice Olympus bodies and lenses prices during big second coronavirus wave, as stock is quite big still.

  • kurthkurth

    @Vitaliy.....so what's your theory why they sold it to someone who'll obviously sell it for scrap, rather than an entity that would attempt to salvage it's technology ? Also what's the deal with that rumor of a russian site registering a new camera ?

  • Vitaliy_KiselevVitaliy_Kiselev

    @kurth

    They sold it to people who are professionals in dumping all people without paying them required money (hard in Japan, but this firm is best at this).

    They are also good in selling all remaining factories and also not pay any debts or salary they owe.

    Present sale is not because Olympus can't bear the costs, no. Sale and timing of it is that present management could get huge bonuses and some nice leave packages and control all the process. As they had been afraid that if they bear it for longer it can be one of investors who will lead the open public attack.

    Most valuable asset is their lens lineup, patents and designers. As well as some labs with people and engineers.

    Also all top guys who design bodies will be able to find jobs in China or Taiwan.

    Most probably it will be either Japanese top brand or Chinese firm who will get all lenses stuff. But can be even Samyang who is very agressive lately.

  • Vitaliy_KiselevVitaliy_Kiselev

    Raver bizzare talk of people who have no understanding of economics and Olympus situation

    I don't know a lot about JIP; they seem like a fairly generic private equity firm, with rather scattershot investments. They were formed for this sort of "carve-out" deal, taking parts of existing companies independent. My concern is that the carve-outs that they do are just that: They're not becoming part of something bigger, but rather are just chopped down to whatever will make them profitable as standalone businesses.

    I do think there's potential for the Olympus Imaging line to become profitable if they trim the deadwood from their lineup, and I think they can continue to manufacture their existing and near-term portfolio, but I worry a bit about their ability to support all the R&D Olympus has traditionally invested in things like cutting-edge IS and their truly excellent optical designs.

    https://www.imaging-resource.com/news/2020/06/25/can-olympus-thrive-after-the-sale-madavors-photo-editors-talk-it-through

    Tragedy of photo industry that amazing people in it are very narrow minded and for years ignored real life situation and unable to talk to real people who do not support position of old pro herd.

  • EspenBEspenB

  • tfinntfinn

    I don't know a lot about JIP; they seem like a fairly generic private equity firm, with rather scattershot investments. They were formed for this sort of "carve-out" deal, taking parts of existing companies independent. My concern is that the carve-outs that they do are just that: They're not becoming part of something bigger, but rather are just chopped down to whatever will make them profitable as standalone businesses.

    I do think there's potential for the Olympus Imaging line to become profitable if they trim the deadwood from their lineup, and I think they can continue to manufacture their existing and near-term portfolio, but I worry a bit about their ability to support all the R&D Olympus has traditionally invested in things like cutting-edge IS and their truly excellent optical designs.

    'Bizarre' is the right word for this statement. Or maybe 'denial'.

  • Vitaliy_KiselevVitaliy_Kiselev

    @tfinn

    Main goal is to add noise and make people fotget that Imaging Resource wrote on the topic, practially following their Nikon stance last year where instead of hard facts we had been presented with sweet nice lies made by Olympus top managers that could partically pay Japan trip IR editor costs.

  • tfinntfinn

    Exactly. I mean all of this talk about 'saving' the Olympus line, 'niche' customers bases, etc. while the company's corpse is being stripped and sold right in front of their eyes...it is just a level of denial that is striking.

  • tfinntfinn

    It is like calling the fire department after the house has burned down to the ground and turned to ash.

  • EspenBEspenB

    So if you actually read the Olympus press release it seems that the way forward is:

    • First Oly will try to slim down the imaging section as much as possible until september 2020 (" structuring reforms").
    • Then Oly will divest the imaging division to a new company ("company split or otherwise").
    • This new company shares will be" transfered" to JIP after a not yet specified transaction amount before the end of the year. (The monetary value could be low (i.e. 1 USD) or negative where Oly actually pays JIP to accept the remaining liabilities.)

    JIP does not seem to have the financials to operate the Oly imaging business with it's current losses for any time period. People who think Oly imaging will continue as before just under new ownership is in denial of the sad state of affairs. As per the press release it will already be substantially slimmed down before the end of september.

    If there was any way of doing further "structuring reform" without seriously impacting operations or product portofolio there stand to reason that this would already been done during the last 3 years of reforms, i.e. "Despite all such efforts, Olympus’s Imaging business recorded operating losses for 3 consecutive fiscal years up to the term ended in March 2020. "

    https://www.olympus-global.com/ir/data/announcement/2020/contents/ir00013.pdf

  • AndrewReid_EOSHDAndrewReid_EOSHD

    The lack of insight in the Imaging Resource article really is amazing isn't it - From such senior editors. Still clueless after all these years about the industry.

    I think Vitaily predicted this months ago and has actual sources.

    IR even after the event, still have no actual sources and are even in denial about what has happened.

  • kurthkurth

    @AndrewReid_EOSHD .... IR is dead. Just because someone posts something on the internet doesn't mean it should be quoted. @Vitaliy predicted this even before corona. Add corona into the mix and there was no way Olympus and many other camera companies will survive. I predicted we'd be selling our used gear for more than we paid for it by the time this is over. In 2 years, when there's no treatment and their vaccine is a failure, most camera production lines will be closed. And it hasn't even really started. Not only in the USa but in europe as well, it's closing again. The world economy is on it's last leg. Suppliers will be dying like flies in most tech industries. You see camera gear companies making medical gear to stay afloat. When people don't have food, cameras are way down the chain of importance. Of course, everyone living off the crumbs try to put on a happyface, like IR, blind to the obvious tsunami that's approaching. The truth is...it's been a good tech run. Everybody should be happy with the gear their using already, although I even might be looking to pickup an em10mkiii for cheap, based mostly on your positive review.

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