Exclusive: TPG willing to invest $1 bln in Olympus in joint deal

Private equity firm TPG Capital is willing to invest about $1 billion in Japan's Olympus Corp in a joint deal with Sony Corp or another suitor circling the scandal-hit firm, a person with knowledge of the matter said.

TPG has informed executives at Sony, Canon Inc, Fujifilm Holdings and Panasonic Corp of its interest in providing capital and expertise to help revive the maker of medical equipment and cameras, the person said.

So far TPG has not received any indication from these strategic suitors that they would be willing to work with the private equity firm on a transaction, the person said, speaking on condition of anonymity due to the sensitivity of the matter.

But TPG believes it could be an effective partner by putting up capital, offering its experience in management, restructuring and the healthcare field, and by taking over parts of the company the strategic investor does not want, the person said.

A TPG spokesman declined to comment.

Olympus has been seeking a friendly investor to make a minority investment and help revive its business after a $1.7 billion accounting scandal erupted in October, crushing its stock price and putting a big dent in its balance sheet.

Sony, Canon, Fujifilm and Panasonic are among the candidates to invest in and form an alliance with Olympus, banking sources have said.

The suitors are attracted by Olympus's very profitable medical equipment business. Olympus dominates the global market for gastro-intestinal endoscopes, a high-margin franchise seen as holding strong growth potential.

Samsung Electronics on Friday ruled out making a bid for Olympus's healthcare business, though a source close to the South Korean firm said it remained open to some form of non-equity partnership.

TPG would consider taking over the other less desirable parts of the firm to facilitate the deal. This would include the loss-making digital camera business, which is in need of a major overhaul including job cuts, the person said.

TPG is one of the world's largest private equity firms with about $48 billion of assets under management. It has considerable experience with the healthcare industry, including a leading role in the $4 billion buyout of drug sales data provider IMS Health in 2009.

The situation surrounding Olympus remains fluid, adding to the difficulty in getting a deal done.

The company is under investigation by police, prosecutors and regulators, while more than half of its board of directors are being sued by Olympus for mismanagement.