Bain makes tender offer for Japan's Kosaido

The GP has won board approval for an offer to buy all outstanding shares for JPY610 apiece, which represents a 43.9% premium to the January 16 closing price. Investors holding at least two-thirds of the shares must accept the bid if it is to proceed. According to a filing, Sawada Holdings has already pledged its 12.4% stake.

Founded in the 1950s, Kosaido was responsible for Japan’s first computer-based character typographical system in Japan. The company remains active in printing and publishing, as well as in other areas of communication services, and it expanded into human resources management solutions. Additional business lines include funeral homes and golf course management.

Having recognized the need to restructure operations and focus on its core printing business, Kosaido was introduced to Bain through a financial intermediary and the two parties began discussing potential growth strategies. The company decided that a privatization was the best option in terms of giving it the flexibility to reorient its business.

Kosaido posted revenue of JPY36.5 billion for the 12 months ended March 2018, up from JPY34.9 billion a year earlier. Over the same period, net income rose from JPY3.27 billion to JPY3.74 billion.

This is Bain’s second Japan tender offer in the space of 18 months. It previously made a JPY151 billion bid for advertising agency Asatsu-DK in late 2017. Despite facing opposition from London-based WPP Group, the company’s largest shareholder, Bain worked with management to close the deal in about two months. More recently, a consortium led by the GP completed a JPY2 trillion acquisition of Toshiba Memory Corporation.

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