Advantage, Tokyo Century agree Japan health foods deal
Advantage Partners has teamed up with Tokyo Century Corp. and Japanese strategic Euglena to acquire Q’Sai, a local health foods and cosmetics business, from Coca-Cola Bottlers Japan Holdings.
The size of the transaction was not disclosed, but Japanese media reported the valuation as approximately JPY40 billion ($386 million). Tokyo Century’s participation is significant because the leasing company is a longstanding LP in Advantage’s funds and last year bought a stake in the GP. This preceded Advantage closing its latest Japan vehicle at JPY85 billion in April.
“This is the first joint-investment deal between Tokyo Century and Advantage Partners and we think this will be a good reference for similar large-scale carve-out M&A deals which require funds and strategic business support,” Toshiya Tsukahara, a partner at Advantage, said in a statement.
The private equity firm will take a 67.22% stake in Q’Sai, with Tokyo Century and Euglena holding 19.94% and 12.84%, respectively. However, Euglena will increase its position to as much as 49% within 12 months. Euglena produces a range of healthcare and beauty care products, generating sales of JPY13.3 billion for the 12 months ended September.
Q’Sai was established in 1965 as a confectionary business and then expanded into frozen foods. It started producing aojiru, a kale-based health drink – known as green juice in English – in the early 1980s. This remains a key part of the portfolio, though it is now supplied in powder form. Other products include a collagen-based remedy for aching knee joints and various skin creams, additive-free soaps, and hair tonics.
The company listed in 1999 and was acquired by Coca-Cola Bottlers Japan – the country’s largest bottling business – in 2010. It has approximately 370,000 mail-order customers and generates JPY25 billion in annual sales. The new owners will support product and customer development initiatives.
This is the third investment Advantage has announced in the past fortnight. It also bought industrial sector human resources outsourcing business Qit – facilitating an exit for CLSA Capital Partners – and Ichikaze Knight Holdings, which sells second-hand luxury watches.
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