CLSA to buy rental subsidiary of Japan's Marubeni

Founded in 1999, the company supplies uniforms to companies operating in a range of industry segments, from food services and retail to office administration and elderly care. In addition to uniform manufacturing and rental, it provides cleaning, maintenance, storage, delivery, and inventory management services.

Marubeni Mates is part of its parent company’s lifestyle division, which is, in turn, a member of the food and consumer products group. This group accounted for JPY1.88 trillion ($16.4 billion) in assets for the 12 months ended March 2017 and JPY61.3 billion in net profit – 27% and 39% of Marubeni Corporation’s overall total. However, more than half of this profit came from grain and food products.

In its most recent annual report, Marubeni Corporation emphasized the need for the food and consumer products group to expand in areas such as food supply in emerging markets, real estate development, and the internet of things and artificial intelligence-related businesses. In this context, the sale of Marubeni Mates appears to represent the divestment of a non-core asset – a familiar deal sourcing theme in Japanese private equity.

Megumi Kiyozuka, a managing director with CLSA CP, said in a statement that the investment reflects the GP’s continued interest in business process outsourcing (BPO). "In addition to Marubeni Mates’ stable profitability, we find the company’s outstanding service quality and ability to fulfill client needs highly attractive and believe the company can exhibit strong growth,” he said.

CLSA CP is currently deploying Sunrise Capital III, its third Japanese fund, which closed last year at the hard cap of $400 million. The Sunrise funds primarily target leveraged buyouts of companies with enterprise valuations of JPY5-15 billion ($44-133 million). They invest across sectors such as consumer products, healthcare, retail, logistics, and manufacturing.

The Marubeni Mates deal comes days after Polaris Capital, another mid-market buyout player, agreed to acquire Fujitsu’s mobile devices business. It was driven by the seller’s desire to focus on its core technology services business.

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• Topics
• North Asia
• Buyouts
• Support services
• Japan
• CLSA Capital Partners