Olympus boss tries to beat buyout firms at their own game
Bob White adopts private equity-style tactics to deflect takeover interest and boost share price
The boss of Olympus is using private equity-style tactics in his bid to turn around the medical imaging device maker and pre-empt takeover bids.
Bob White is fighting to boost a share price that has fallen by about 15 per cent over the past two years, as the Japanese group reels from a long-running US regulatory compliance saga and his predecessor’s exit on illegal drug charges.
He told the FT he is taking a leaf out of private equity’s playbook by adopting the kind of restructuring actions they would look to implement, including cutting 2,000 jobs, overhauling its regional set-up and selling assets to simplify its portfolio.
“I say operate as if they sit at the table,” White said in an interview in Tokyo. “I don’t operate from a position of fear . . . I don’t think there’s any strategy in the private equity playbook that we aren’t [using].”
Some of the world’s largest private equity firms have informally approached Olympus about acquiring the 107-year-old business but have not yet submitted offers, according to people familiar with the matter.
The company said it did not comment on market speculation.
Olympus’s attraction is its dominant global position in medical endoscopes — thin tubes equipped with cameras used for non-surgical internal inspections. The number of procedures could triple to 600mn annually thanks to the rise of AI and robotics.
Buyout executives in Tokyo suggest privately that the market will give White time to demonstrate he can turn around Olympus and that they must wait before any bids have a chance of succeeding.
Strong first-quarter results boosted the share price earlier this month, but analysts asked whether those gains were sustainable. “The question now is whether momentum in North America can stay strong as rivals launch new products,” said analysts at SMBC Nikko.
Any takeover of Olympus, whose market value stands at ¥2.3tn ($14.7bn), could rank as Japan’s biggest private equity deal.
It could eclipse the roughly ¥2tn buyouts of Toshiba by Japan Industrial Partners in 2023, and Toshiba Memory, now called Kioxia, completed in 2018 by a Bain Capital-led consortium.
White is a veteran of the medtech industry who was at Medtronic before becoming chief executive of Olympus just over a year ago. The American, a rare foreign boss in Japan, cited the launch of a strategic review of its surgical endoscopy business as one of his big private equity-style moves.
Olympus has been roiled by scandals since British chief executive Michael Woodford exposed an accounting fraud in 2011 that had concealed $1.7bn of losses. In late 2024 Stefan Kaufmann was pushed out of the top job over allegations that he purchased illegal drugs.
Endoscopes helped steady the company through the aftermath of the first scandal and have become its main business. In 2020 Olympus offloaded the camera unit that the company was famous for, while Bain Capital later bought other non-core operations, such as the microscopy and life sciences business, for $3.1bn.
Just weeks into White’s tenure, its feud with the US Food and Drug Administration escalated, however, and continues to influence the share price. A range of Olympus medical devices are banned from the US because of a product safety alert that followed three warning letters in 2022 and 2023 about manufacturing quality issues.
White’s new style of leadership helped a nascent turnaround in financial earnings in May, prompting shares to slightly recover, and the internal cultural changes mean he believes that “there’s zero difference between what the FDA wants and what we want”.
Stephen Barker, an analyst at Jefferies, said that White marked a break from a “highly insular leadership structure” at a company characterised by weak internal controls and governance.
One person close to Olympus management said that persistent weakness in the share price had prompted the company to consider defence options.
Any takeover offer for the company would be politically controversial in Japan, as Olympus is one of the country’s most famous brands and plays a critical role in the domestic healthcare system.
“The heart of Olympus will always be in Japan,” said White.