Japan’s Polaris Capital to acquire 80% stake in Panasonic’s spinoff business

The company logo of Panasonic Corp is seen at CEATEC (Combined Exhibition of Advanced Technologies) JAPAN 2015 in Makuhari, Japan, October 6, 2015. REUTERS/Yuya Shino - RTS38NE

Japanese buyout firm Polaris Capital announced that it is acquiring an 80-per cent stake in the new company that Panasonic Corporation is setting up as a spin out of its parent’s security systems business.

In a statement, Polaris said it has agreed to a strategic capital alliance with Panasonic and signed a share purchase and shareholders agreement through one of its funds, Polaris Private Equity Fund IV LP. Panasonic will hold the remaining 20 per cent.

Financial details of the deal were not immediately disclosed but Polaris said the transaction is expected to be completed on October 1, 2019, subject to the approval of the relevant authorities.

The new company, Panasonic i-PRO Sensing Solutions Co Ltd, will comprise of the security systems business division as well as the industrial and medical vision compact camera R&D development of Panasonic’s Innovation Center.

In addition, Panasonic said, the public safety sales and development functions of Panasonic System Solutions Company of North America and its camera manufacturing facility in China will become subsidiaries of the new company.

The Security Business Division has a roughly 60-year history of developing security cameras and advanced edge devices and combining these with unique software such as facial recognition to meet the needs of the market.

Panasonic said the division has established itself as a top brand in the Japanese security camera market. Panasonic currently operates 582 subsidiaries and 87 associated companies worldwide, recording consolidated net sales of JPY8 trillion for the year ended March 31, 2019.

“With rising global demand for security and safety, the security related business is a field that is forecast for growth; and by establishing the new company and concluding a co-investment agreement with Polaris, Panasonic believes that it can achieve stable growth in this market,” the Japanese manufacturing giant said.

Polaris Private Equity Fund IV LP closed in May 2017 with up to $668.4 million in commitments. Polaris Fund IV was launched in the fourth quarter of 2016 targeting investors across the globe.

In February, Polaris exited its timber portfolio company Hivic to Yamae Hisano in a JPY8.55 billion ($77 million) deal. Polaris Capital acquired 100 per cent stake in Hivic in a carve-out deal in 2016.

Its third flagship fund held 75.2 per cent in the company while Tiara CG Private Equity Fund 2013, a vehicle advised by Polaris, owned the remaining 24.8 per cent.