Carlyle, Unison seek buyer for Covalent Materials - report

According to Bloomberg, the two private equity owners are preparing an auction for Covalent - formerly called Toshiba Ceramics - and are seeking to raise as much as JPY50 billion ($489 million) from the proposed sale. It is scheduled to be completed by the end of this year.

Carlyle and Unison bought around 92% of Toshiba Ceramics in a JPY91 billion management buyout in 2006, which saw the business delist from the Tokyo Stock Exchange and be renamed Covalent. The company was struggling following a drop in semiconductor prices and restructuring was required.

Covalent produces the materials needed for semiconductor production, such as quartz glass, silicon carbide products and ceramics. It also makes medical products such as artificial bone filler.

The firm sold its silicon wafer business to Taiwan's Sino-American Silicon Products in March 2012 as part of efforts to shift focus to ceramics production. The $450 million transaction represented a partial exit for Carlyle and Unsion; they now jointly hold 94% of Covalent, while Toshiba Corp. has about 3%.

The company averted debt default a year later when it reached an agreement with bondholders to buy back securities and extend their maturity, after finding it was unable to repay about JPY53 billion in bonds.

According to financial results posted in November, Covalent's net income rose 12% year-on-year to JPY1.64 billion for the six months ended September 30. 

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• Topics
• North Asia
• Technology
• Exits
• Exit
• Japan
• The Carlyle Group
• Unison Capital
• manufacturing