Shares in Bain-backed Skylark fall on Tokyo debut
Shares in Skylark, the Japanese restaurant operator backed by Bain Capital, fell by nearly 4.8% on the first day of trading on the Tokyo Stock Exchange (TSE) following a JPY75.1 billion ($686.2 million) IPO.
The company sold 62.6 million shares - including an over-allotment option of 7 million shares - at JPY1,200 apiece, the bottom end of the indicative range. The stock opened flat before closing at JPY1,143.
About 4.1 million new shares were offered by the company while Bain and fellow PE-backer Japan Industrial Partners (JIP) sold 57.3 million shares and 1.3 million shares, respectively. Following the offering, Bain's stake in the business has been reduced from 97.7% to 66.1%, while JIP's holding has fallen from 2.2% to 1.5%, on a fully diluted basis.
Skylark launched in 1970 as a family-style restaurant, akin to American eateries such as Denny's. The company first went public in 1982 but was taken private in 2006 when Nomura Principal Finance, a unit of Nomura Holdings, acquired Skylark in a management buyout alongside CVC Capital Partners, for approximately JPY380 billion (then $3.19 billion). Nomura purchased a 77.76% stake while CVC bought 20.96%.
Bain then acquired a 100% stake in the business for JPY160 billion in 2011. JIP had participated in the same transaction as a minority investor.
The offering is being closely watched following some poor debut performances on the TSE this year. Among them is Japan Display, a supplier of screens for the Apple iPhone, which has seen its stock fall by 42% against the IPO price following a $3.3 billion offering in March.
The year has contrasted sharply with the bullish IPO market of 2013 when investors were buoyed by Prime Minister Shinzo Abe's sweeping economic reforms. A total of 36 PE and VC-backed IPOs raised $1.38 billion - the most since 2006 if one discounts the $8.5 billion listing of Japan Airlines in 2012 and the $1.2 billion TSE IPO of Korean online gaming company Nexon Corp. in 2011.
Earlier this year, Bain Capital sold a 49.9% stake in Bellsystem24 Holdings to trading house Itochu Corporation for an undisclosed amount. The GP had acquired Bellsystem24 from Citigroup Capital Partners Japan for JPY100 billion in 2009.
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