Ant Capital targets $253m buyout of Japan's Softbrain
Ant Capital Partners has launched a tender offer for Softbrain, a Japanese sales and marketing software developer, that values the business at approximately JPY26.9 billion ($253.1 million).
The private equity firm is looking to acquire up to 14.64 million shares – or a 49.77% stake – for JPY871 apiece, according to a filing. This represents a 113% premium to the August 13 closing price of JPY408. At least 4.83 million shares must be tendered for the offer to proceed.
The transaction will be supported by debt funding from Mitsubishi UFJ Bank and Shinsei Bank, as well as mezzanine financing from a fund tied to Solution Group, a local IT and corporate services company.
Ant Capital is participating through Ant Catalyzer No.5, which closed at JPY31 billion in late 2017. It will own the business in partnership with Scala, a Tokyo-listed software and communications business that already holds 50.23% of Softbrain. Scala will not participate in the tender but plans to merge its shares with the Ant Capital acquisition vehicle once the tender is completed.
Softbrain was established in 1992 and went public in 2000. Scala took a minority stake in the company in 2016 and gradually increased its holding over several years.
Softbrain’s core business area is sales innovation, which involves selling sales support systems, cloud services, and sales consulting and training services. There is also a field marketing operation and a publishing business. The company wants to develop its subscription-based software and consulting, and it decided that this transformation would be best pursued under private ownership.
Revenue for the year ended December 2019 came to JPY9.89 billion, down from JPY9.18 billion the previous year. Over the same period, net profit fell from JPY796 million to JPY764 million. The sales innovation division – led by Softbrain’s flagship customer relationship management suite – generated JPY5.16 billion in sales, with field marketing contributing JPY4.1 billion.
Ant Capital targets mid-market private equity opportunities tied to business succession situations, recapitalizations, privatizations, and corporate carve-outs. Portfolio companies include sushi restaurant chain Amino Corporation, business management information portal Entrée, knitwear business Fenix International, and pasta retailer Newokubo.
The firm also runs a secondary buyout strategy that acquires minority stakes in private companies and LP interests in private equity funds.
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