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Panasonic And KKR Agree To Panasonic Healthcare Share Purchase

Panasonic Corporation (“Panasonic”) and Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, "KKR") today announced the signing of a share purchase agreement and a shareholders’ agreement under which Panasonic and KKR will become joint partners of Panasonic Healthcare Co., Ltd. (“Panasonic Healthcare”).

Based on today’s agreements, PHC Holdings Co, Ltd. (“PHCHD"), which is wholly-owned by KKR investment funds, will purchase all outstanding shares of Panasonic Healthcare, including its related intellectual property and assets, for an equity value of approximately JPY 165 billion (approximately US$ 1.67 billion at the exchange rate of US$1=JPY99). The transaction will be followed by a third party share allocation by PHCHD, after which KKR will own 80% of outstanding shares of PHCHD and Panasonic will own 20%. Panasonic and KKR will cooperate in the management of Panasonic Healthcare.

Panasonic Healthcare is a comprehensive healthcare company focusing on three core businesses— In Vitro Diagnostics, Medicom, and Biomedical. Panasonic Healthcare’s In Vitro Diagnostics business has a leading global market share in the manufacture and sale of blood glucose monitoring meters and sensors for diabetics. Its Medicom business has the top share in Japan in medical receipt computers, electronic health record systems and other IT equipment for medical clinics, while its Biomedical business has a leading market share in Japan and overseas in biomedical laboratory equipment including CO 2 incubators and ultra-low temperature freezers.

Panasonic and KKR will leverage their respective business resources, including their healthcare industry knowledge, technology, and specialist expertise, as well as their global healthcare industry investment experience and network, to together aim for further growth of Panasonic Healthcare.

Panasonic President, Kazuhiro Tsuga, said, “As previously announced in Panasonic’s New Midterm Management Plan, we have been seeking a partner who shares our vision for achieving a step change in the growth and evolution of Panasonic Healthcare. Today, we are pleased to have reached an agreement with KKR to acquire Panasonic Healthcare. We understand KKR has been actively investing in the expanding healthcare sector, and we highly respect KKR’s industry expertise and its capability to provide the necessary growth capital and operational know-how, in preparation for the future development of Panasonic Healthcare in the global healthcare industry. Through our partnership, Panasonic will work with KKR to support the growth of Panasonic Healthcare, which will continue to be a member of the Panasonic Group. At the same time, we believe that partnering with KKR will also allow us to learn from KKR’s global operational and business management expertise as we pursue the next stage in growth for Panasonic.”

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