KKR seals second Japan tender offer with $4.5b Calsonic deal

KKR agreed to buy Nissan’s 41% holding in Calsonic last November and subsequently launched a bid for the entire business. Investors representing 95.21% of the existing common shares – Nissan among them – voted in favor of receiving JPY1,860 per share, inclusive of an expected special dividend, which represents a 40% premium to the last close before the offer was announced. A two thirds approval threshold had to be met for the deal to go through.

KKR’s other tender offer for power tools manufacturer Hitachi Koki was structured in a similar way. First, the private equity firm agreed to buy Hitachi’s 40.25% controlling interest in the business; then it launched a tender offer of JPY147.1 billion, which has been accepted.

Calsonic supplies components including vehicle interiors, climate control systems, compressors, exhaust systems and electronic products. Nissan is by some distance its main customer, accounting for 80% of transactions. However, the company also works with Renault – which owns 44% of Nissan and has a strategic alliance with the automaker – Isuzu, Daimler and General Motors.

Nissan launched an auction to sell its stake in April, with other private equity firms among the bidders in addition to KKR. The carmaker said the deal would help make Calsonic more competitive. Calsonic reported net sales of JPY1.01 trillion for the 2015 financial year, up from JPY965.6 billion for the 12 months prior to that. Net income rose to JPY34.4 billion from JPY28.3 billion over the same period.

"We are excited to work alongside the KKR team given their extensive global expertise in the auto, manufacturing and services sectors, as well as their shared goals for our business. Through this partnership, we look forward to seeing Calsonic Kansei grow by reaching new markets and providing innovative new products to customers worldwide,” Hiroshi Moriya, CEO of Calsonic, said in a statement.

Both the Calsonic and Hitachi Koki investments will come predominantly from KKR’s second pan-Asian fund, which also includes carve-outs of Panasonic Healthcare and Pioneer Corporation’s DJ equipment business. The GP is currently raising its third regional fund, which has an institutional hard cap of $8.5 billion.

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• Topics
• North Asia
• Buyouts
• Industrials
• Japan
• KKR
• manufacturing
• automobiles