Japan Industrial Partners agrees manufacturing carve-outs

The private equity firm will pay approximately JPY9 billion ($83.6 million) for 90% of Kobelco & Materials Copper Tube, which is jointly owned by Kobe Steel and Mitsubishi Material. Kobe Steel will retain the outstanding 10%, according to a filings by both JV partners.

Established in 2004, the company manufactures copper pipes used in air conditioning systems, construction and water supply. It generated JPY51.6 billion in sales for the 12 months ended March 2019, up from JPY49.1 billion a year earlier. Over the same period, net profit dropped from JPY890 million to JPY573 million.

Furukawa said that it was selling its copper tubes unit – which recorded JPY10.4 billion in revenue last year – to JIP in order to focus on core business areas and to give the subsidiary a better pathway for growth. The company noted in a statement that JIP is targeting “integration with other copper tube companies, will contribute to the sustainable growth of the business.”

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. The firm is currently deploying its fifth fund, which closed last year at JPY148.5 billion, including a JPY46.2 billion co-investment vehicle.

Last month, JIP agreed to buy NEC Corporation's majority stake in Tokyo-listed electronics supplier Nippon Avionics and launched a tender offer that values the company at about JPY3.1 billion. It would represent the firm’s fourth carve-out from NEC in five years.

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• Topics
• South Asia
• Buyouts
• Industrials
• Japan
• Japan Industrial Partners
• manufacturing