OSAKA — Panasonic Corp. has reached an agreement with Tokyo-based Polaris Capital Group to establish a new company that will operate its security systems business in Japan, the United States and internationally.
Under terms of the agreement, announced May 31, Polaris Capital Group will acquire 80% of the outstanding shares of the company to be newly established by Panasonic to succeed the Security Systems Business.
Panasonic will transfer its video surveillance equipment manufacturing and R&D operations — including its factory in Suzhou, China — to the new company. Polaris Capital Group then will purchase a majority stake in the new company, which will be named Panasonic i-PRO Sensing Solutions Co., Ltd.
The new company will be formed with the Security Systems Business Division of Connected Solutions Co. of Panasonic as a main body and will include the industrial and medical vision compact camera R&D department of its Innovation Center.
Polaris has experience in strategic capital alliances with manufacturers and large-scale companies, according to the announcement. The Polaris strategy will be “to strengthen solutions capabilities with an eye to aggressive alliances and M&A strategies, leverage these strengths to expand its earnings base on a global scale, centered on the North American market, provide new products and services for the next generation, and expand sales of camera modules for medical devices,” the announcement states.
Panasonic will continue to be involved in the management of the new company. Security cameras and other video surveillance products will be sold under the Panasonic brand.
The transaction is expected to be completed by Oct. 1, subject to regulatory approval.
The agreement follows Panasonic’s recent struggles to keep pace in the video surveillance market with competing Chinese firms. Rumors first emerged in 2018 that Panasonic may be considering selling its security camera manufacturing business due to disappointing sales outside of Japan.
The spinoff is expected to strengthen software development, including corporate systems and maintenance services, while leveraging Polaris for facility spending.
In a May 31 letter addressed to clients and partners of Panasonic Canada obtained by SSI, President Michael Moskowitz states the strategic alliance will allow the new company “to become more agile, creating even more value for our customers through the research, development and introduction of new and next-generation products and services.”
Existing clients and partners should experience no disruption in service during the transition, he said.
“Panasonic has a long history of developing leading edge cameras and public safety products, integrating unique software such as facial recognition to meet the needs of a rapidly changing market and establish itself as a top brand,” Moskowitz says. “When it comes to the growth of the security systems business, we see Polaris Capital Group as an important partner going forward.”
SSI continues to report this story.
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