Carlyle launches tender offer for Money Square Japan

Money Square said in a filing that its board was endorsing an offer from a Carlyle-owned entity of JPY1,250 per share, which represents a 42% premium to the company's last trading price. The GP is seeking to buy 7.83 million shares - a 71.44% interest - for JPY9.78 billion ($96.2 million), valuing the entire business at JPY13.7 billion.

Should an acceptance threshold of 4.17 million shares fail to be met, no shares will be purchased. Aiba Hitoshi and Hisatoshi Yamamoto, who founded Money Square in 2002 and continue to hold senior executive positions in the company, between them own 3.13 million shares - or a 28.5% stake - that will not be sold to Carlyle.

Money Square offers market making, entrustment, brokerage, consulting, and client support services for trading foreign exchange and stock index contracts for difference. The company went public in 2007 and transferred to the First Section of the Tokyo Stock Exchange in 2014.

Revenue came to JPY5.31 billion for 2016 financial year, up from JPY5.29 billion in 2015, although net income dropped 10.2% to JPY1.43 billion. The offer valuation was based on sales and EBITDA projections of JPY4.59 billion and JPY1.97 billion for the nine months ended March 2017. For the 2018 financial year, revenue is expected to reach JPY6.15 billion with EBITDA coming in at JPY2.35 billion.

Carlyle is currently investing its third Japan fund, which closed at JPY119.5 billion in September 2015. The portfolio includes two other companies acquired via tender offers: mortgage bank SBI Mortgage and metal products manufacturer Hitachi Metals Techno.

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• Topics
• North Asia
• Buyouts
• Financials
• Japan
• Financial Services
• The Carlyle Group