Japan Industrial Partners makes tender offer for Nippon Avionics

It would represent JIP’s fourth carve-out from NEC in five years, following the acquisitions of switches and routers maker Alaxala Networks, IT services provider Biglobe, and automotive supplier NEC Tokin.

NEC will sell its entire 50.1% holding in Nippon, or 1.4 million shares, through the tender process. The price is JPY1,100 per share, which would generate proceeds of JPY1.7 billion for the local conglomerate. JIP has made an open offer to other shareholders with a view to accumulating a stake of up to 55%. Nippon was trading slightly higher at JPY1,260 as of midday on August 1.

The private equity firm – which closed its fifth fund last year at JPY148.5 billion including a JPY46.2 billion co-investment vehicle – does not intend to de-list the company, according to a statement. Nippon is expected to focus on M&A and strategic partnerships under the new ownership.

Founded in 1960, Nippon manufactures a range of electronics, including sensors and communication equipment, as well as devices for consumer, medical, office, defense, and astronautic uses. Last week, it announced the launch of a new product aimed at automating packaging processes in manufacturing.

The company operates via headquarters in Tokyo, two production facilities in Yokohama and a sales office in Fukuoka. Revenue for the 12 months ended March 2019 came to JPY17.5 billion, down from JPY18.7 billion the prior year. Net profit for the year was JPY22 million, compared JPY606 million the prior year.

JIP was established in 2002 with a mandate to support the revitalization of Japanese companies, primarily by carving out and restructuring assets from large players and straight restructurings of mid-size businesses. AVCJ Research has records of more than 20 deals across a range of sectors, although manufacturing is a strong theme. Recent activity includes participation in a KKR-led acquisition of a Hitachi manufacturing unit for JPY322 billion.

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• Topics
• North Asia
• Industrials
• Technology
• Buyouts
• PIPEs
• Japan
• Japan Industrial Partners
• manufacturing