UPDATE: Fujifilm Agrees To Buy US SonoSite For $995 Million, Latest Acquisition In Japan Buying Spree

Fujifilm Holdings Corp. (4901.TO) said Thursday it has reached an agreement to buy U.S. medical equipment maker SonoSite Inc. (SONO) for $995 million, in the latest instance of Japanese companies hunting down overseas peers to make up for their dim prospects at home.

The Tokyo-based maker of cameras, copiers and medical equipment said it will acquire all the outstanding common shares of SonoSite through what will be an all-cash tender offer of $54 per share. The purchase price represents a premium of 50% over SonoSite's average closing stock price over the three months through Wednesday.

The deal is yet another indication of the strong appetite for investment overseas among firms in Japan that has positioned the nation as the world's third largest cross-border acquirer this year.

Fujifilm said the tender offer will kick off within 20 working days and will remain open for 21 U.S. business days.

The company said SonoSite, a world leader in point-of-care ultrasound products based in Bothell, Wash., will continue its operations in the U.S. as a wholly owned subsidiary. The U.S. firm specializes in the development of ultra portable devices that are used in more than 20 clinical specialties. Fujifilm said the latest deal is friendly, adding that SonoSite's board of directors will recommend its shareholders accept the tender offer.

"We are delighted to be joining forces with SonoSite. The transaction significantly accelerates Fujifilm's full-scale entry into the fast-growing hand-carried ultrasound equipment market and will position ultrasonography as a strategic pillar for the future growth of our medical system business," said Fujifilm chief executive Shigetaka Komori in a press release.

Faced with saturated demand at home, Japanese companies are striving to obtain a bigger slice of market share overseas. The yen's strength is also providing Japanese companies with spending ammunition to press ahead with the buying spree.

According to data provider Dealogic, the value of acquisitions abroad by Japanese companies so far this year has come to a record $79.7 billion, led by Takeda Pharmaceutical's (4502.TO) $14 billion purchase of Swiss competitor, Nycomed.

The string of deals has positioned Japan as the third-biggest cross-border acquirer behind the U.S. and the U.K. this year.

Since the financial crisis of 2008, Japanese companies have amassed large stockpiles of cash and refrained from capital spending. With Japanese banks willing to finance deals, corporations are in a good position to make acquisitions.

Fujifilm has diversified from making film into manufacturing industrial materials and equipment ranging from liquid crystal display film to medical X-ray systems.

-By Hiroyuki Kachi, Dow Jones Newswires; 813-6269-2789; [e-mail]