Terumo Corp <4543.T> said it would buy U.S. medical device company CaridianBCT from a Swedish firm for about $2.6 billion, marking the largest acquisition by a Japanese medical equipment maker.
The deal underscores an aggressive push by Japanese firms to take advantage of a strong yen to snap up overseas assets and expand outside their mature home market.
Terumo will buy CaridianBCT from Gambro, which is jointly controlled by Investor AB and private equity funds manager EQT IV, in a move Terumo said would catapult it to the top of the global blood tranfusion market from the No. 5 ranking now.
Terumo has been trying to boost its blood transfusion-related operations and the deal is expected to help it, said Satoru Takaoki, chief analyst at SMBC Friend Research Center.
The transaction value is about 14 times Caridian's EBITDA, and it's slightly higher than typical multiples, but I think it is within an acceptable range.
Terumo estimated the deal would help it generate 70 billion yen ($850 million) in annual sales from its blood-transfusion operations, becoming a new growth driver as it aims to triple group sales to 1 trillion yen within 10 years.
Terumo, which competes with Olympus Corp <7733.T> and Nipro Corp <8086.T> in the medical equipment business, said it plans to use cash available and bank loans to complete the deal by May.
Colorado-based CaridianBCT, which employees 2,300 people, specializes in making equipment used in blood banks and other disposable medical devices. It had sales of $524 million in the year ended in December, up 7.2 percent from a year ago.
Investor and EQT IV hired Goldman Sachs and Shearman & Sterling to advise them on the transaction.
Encouraged by the still-strong Japanese yen, the country's drug and medical equipment makers have been among the most active acquirers of overseas firms.
The deal by Terumo, which ranks as the biggest by a Japanese medical devices maker, comes just a week after drugmaker Daiichi Sankyo <4568.T> announced plans to buy privately held Plexxikon Inc of the United States for $805 million to gain a late-state melonoma treatment.
Fujifilm Holdings Corp <4901.T> has also agreed to buy Merck & Co's BioManufacturing Network, including two biotechnology manufacturing plans.
Terumo's shares closed down 1.75 percent at 4,495 yen before the announcement, while the Nikkei 225 average <.N225> lost 1.8 percent.
(Additional reporting by Taiga Uranaka; Editing by Vinu Pilakkott and Nathan Layne)