Digital-camera maker Canon has offered 23.6 billion Swedish krona (about $2.8 billion) to acquire Sweden-based Axis, a maker of network video surveillance equipment. The companies announced the deal Tuesday.
Under the terms of the deal -- the largest in Canon's history -- the company would acquire all of Axis' outstanding shares in cash. The Axis board of directors has already called on shareholders to accept the deal, and the Swedish company's three largest shareholders, who collectively own 39.5 percent of its stock, have accepted the deal.
Axis offers a range of security products, including cameras, network-based video recorders, and encoders. The company caters mainly to corporate users, offering security services to the retail and banking industries, among others. Axis has over 1,900 employees and generated sales of 5.5 billion krona in 2014. Its profit during the period hit 539 million krona.
The Axis buy could help Canon on multiple levels, the camera maker said. Canon is specifically interested in the Axis patent portfolio and the "synergies" it sees between the Axis network video services and its own optical and imaging capabilities. Canon also thinks it can more effectively target the enterprise with Axis' help.
Canon has been experiencing its fair share of issues as its core business, digital cameras, has been hit hard by a weak global economy. Late last month, Canon reported that "demand for interchangeable-lens digital cameras continued to face harsh conditions due to the economic slowdown. As for digital compact cameras, demand continued to shrink in both developed countries and emerging markets."
Despite the issues, Canon sees possibilities for growth in the corporate world, which Axis caters to. The company reported that in 2014, its office and industry business segments, which include everything from printers to medical devices, were both up year over year. Those gains helped Canon boost its earnings in 2014, earning $2.1 billion in profit, representing a 2 percent gain compared to the prior year.
Canon is expected to set an offer acceptance period for March 3 to April 1. During that period, shareholders will need to either accept or decline the deal. If the deal earns the requisite votes, it will be subject to customary closing conditions before completion.
Axis shares are up 50 percent, to 340 krona, following news of the deal.
Neither Canon nor Axis immediately responded to a request for comment.