Fresh from downscaling its high-cost telecommunications-related molding plants in Finland, Perlos Corp. has revealed plans to spin off its smaller noncore health-care products business.
The global telecommunications component major has agreed to sell all Perlos Healthcare division assets, including plants in Kontiolahti, Finland, and Sunderland, England, to a joint venture company it will set up with Swedish private equity firm Ratos AB.
Perlos Healthcare manufactures drug delivery and disease management devices, birth control systems and diagnostic devices. On the personal-care side, it makes products for drug dispensing and vision and dental care.
Stockholm-based Ratos will own 78 percent of the venture, according to a memorandum of understanding signed by the firms. NurmijÃ¤rvi, Finland-based Perlos will invest up to 9 million euros ($11 million) in the new company.
Perlos Healthcare's present management, led by its chief executive, Jouni Pohjonen, will stay on in the new venture and hold a 2 percent stake. All current employees are set to remain.
The joint venture will pay 67 million euros ($84 million) in cash for Perlos Healthcare, which employs about 500 and recorded sales of nearly 53 million euros ($66 million) in 2005.
``The health-care business area has great potential for the future. However, with Perlos' core business in telecommunications and electronics growing very rapidly, there are not enough resources in place to invest in further opportunities in health care,'' said Perlos Chief Executive Officer and President Isto Hantila.
The firms said they plan to build the venture into a global player through internal expansion and acquisition.
``The industry's strong growth and profitability, coupled with its fragmented structure, offer many interesting opportunities,'' said Ratos CEO Arne Karlsson.