CLSA sells Japan outsourcing business to Advantage
CLSA Capital Partners has sold Japan-based industrial sector human resources outsourcing business Qit to Advantage Partners for an undisclosed sum.
CLSA acquired 100% of Qit in 2016 via its Sunrise II fund, which targeted Japanese companies with enterprise valuations in a range of JPY5-15 billion ($48-144 million). At the time, Qit was known as Outsourcing Investments and had 2,500 employees across nine subsidiaries with annual sales around JPY10 billion.
CLSA described the company’s growth during the holding period as exponential, citing value-add initiatives such as recruitment support, optimal resources allocation in core business areas, and efficiency-driven management restructurings. There were also four bolt-on acquisitions, including a specialist in maintenance services for semiconductor manufacturing equipment.
Qit focuses on manufacturing-related staffing services, including subcontracting, training, and dispatching technicians. In addition to semiconductor equipment repair, subsidiaries target niches such as mechanical staffing for the automotive sector and human resources for electronics companies. Specialization is believed to support stronger profitability versus more generalist outsourcing players.
Advantage is currently deploying its sixth Japan buyout fund, which closed at the hard cap of JPY85 billion in April.
“Qit plans to grow by finding new ways to contribute to its clients operations and by exploring the possibility of evolving from a staffing business model to an outsourcing business model based on its accumulated technological capabilities while also considering inorganic growth through M&A,” Advantage said in a statement.
Sunrise II closed at $210 million in 2014 and has made at least seven Japanese mid-market acquisitions, including Qit, according to AVCJ Research. Previous realizations include a partial exit of cram school operator BC Ings in 2017 to the government’s Hiroshima Innovation Fund and the sale of automotive supplier Worldtool last year to home improvement chain Royal Homecenter.
CLSA closed its fourth Sunrise fund at $450 million in September after three months in the market.
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