By Ben Hirschler
LONDON (Reuters) - Nikon (T:7731), the 98-year-old Japanese company best known for its cameras, has agreed to buy British retinal imaging firm Optos (L:OPTS) for 259.3 million pounds ($400 million) as it moves into the medical sector.
Nikon has previously said it intended to enter the medical sector to leverage its optical technologies and the Japanese group sees buying Optos as an important step in that long-term growth plan.
Kazuo Ushida, president of Nikon, said the company would expand the medical business further in the future.
The Japanese group will pay 340 pence a share in cash for Optos, a 30.5 percent premium to the closing price on Thursday, the two companies said in a statement.
News of the deal, which already has the backing of shareholders representing 13.2 percent of Optos shares, sent the stock to a all-time high of 339p in early trading on Friday. Back in 2009, the shares hit a low of just over 30p.
Optos is the market leader in retinal imaging and its ultra widefield technology produces images that cover more than 80 percent of the retina, which is greater than any other device.
Retinal imaging is a booming business due to aging populations, which puts more people at risk of developing age-related macular degeneration, a leading cause of blindness. Rising rates of diabetes and resulting eye complications have also increased demand for sophisticated retinal monitoring.
Optos is the market leader in retinal imaging by sales, with a share of just over 30 percent, but its business is currently heavy skewed to North America, where it generates 72 percent of its revenue.
"Nikon is strong globally, while our business is strong n North America, so there are good growth opportunities in both Europe and Asia," Optos Chief Executive Roy Davis told Reuters.
Optos generated revenue of around $170 million in the year to Sept. 30, 2014 and operating profit before exceptional items of approximately $16 million.
($1 = 0.6478 pounds)