MBK completes tender offer for Japan's Kuroda Electric
MBK Partners has completed its tender offer for Japanese electronic components manufacturer Kuroda Electric, having received support from more than 50% of shareholders for the JPY102 billion ($895 million) deal.
The private equity firm submitted an offer of JPY2,720 per share in early November, with the prerequisite that investors holding at least 18.9 million shares accept the bid. It has secured just over 25.7 million shares, according to a filing.
Three shareholders – Reno, Aya Nomura, and Office Support Corporation – representing 11.1 million shares agreed to exit their positions ahead of the offer being made public. Reno is an investment fund with ties to activist investor Yoshiaki Murakami, while Nomura is Murakami’s daughter. The same three parties sold their shares when MBK made a successful tender offer for Accordia Golf last year.
In June, the Reno group of shareholders overcame resistance from Kuroda’s management team and got Shin Yasunobe, a former economy ministry official, appointed to the board as an external director. Reno wanted Yasunobe to advance discussions over acquisitions and strategic partnerships, in addition to calling for improved corporate governance and share buybacks, Nikkei reported.
Founded in 1945, Kuroda supplies components for use in automobiles, LCD televisions, handheld devices, and hard disk drives. It has 11 offices, five logistics centers and four manufacturing group companies in Japan, as well as 33 manufacturing and sales bases in 14 countries overseas. Japan and the rest of Asia account for 34% and 43%, respectively, of the company’s sales.
Consolidated sales came to JPY229.6 billion in the 12 months ended March 2017, down from JPY285.6 billion the previous year. Over the same period, net profit increased from JPY3.87 billion to JPY4.84 billion.
Private equity investors have launched and closed six tender offers of $800 million or more for listed Japanese companies since November 2016. In addition to MBK’s Accordia and Kuroda deals, Bain Capital Private Equity has acquired advertising agency Asatsu-DK while KKR picked up manufacturing businesses Calsonic Kansei Corporation, Hitachi Koki, and Hitachi Kokusai.
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