Hitachi sells radiation devices business to Nippon Mirae Capital

According to a filing, Nippon Mirae is investing via its fourth flagship fund, which will acquire the businesses as “investment support service provider” to a special purpose company set up by Hitachi. Due to the structure of the deal, which involves a handover of the assets from Hitachi to a 100%-owned subsidiary, financial details were not disclosed.

The radiation measurement devices business, founded in the 1950s, provides environmental radiation monitoring systems, radiation management systems, and survey meters to a clientele including national and local governments, power companies, universities, research laboratories, and hospitals.

The industrial x-ray CT devices unit, which dates back to Hitachi’s first electron linear accelerator experiments in the early 1990s, delivers 3D imaging products to research institutions and industries such as automotive. Its capacities span the design, manufacture, sales, and maintenance of the scanning equipment.

The businesses recorded combined revenue of JPY8.7 billion ($76.3 million) and net profit of JPY518.5 million in the 2021 financial year. The projections for 2022 are JPY9.5 billion and JPY620 million. There will be no changes in head office, leadership, or business structure following the divestment.

Hitachi said Nippon Mirai was the optimal choice for developing the businesses in the medium and long term due to its experience growing mid-sized companies and “supporting the construction of structures in keeping with the independence of business divisions of large companies.”

This is not the first time Nippon Mirae has carved out a non-core unit from Hitachi. In 2017, the private equity firm acquired a 60-year-old forged steel roll business from Hitachi Power Solutions. The prior year it bought an information network and wireless antenna business from Hitachi Metals. Both transactions were realized via similar special purpose vehicles.

Hitachi is the poster child for a movement of Japanese conglomerates shedding non-core units as they transition into more digital-oriented entities. It has pledged to reduce the number of group companies in its portfolio from 800 in 2009 to 500 by 2022.

Most recently, a Bain Capital-led consortium agreed to acquire Hitachi Metals for JPY816.8 billion. This would be Japan’s second-largest private equity buyout.

PE investors are expected to continue benefiting from increased carve-out opportunities, but securing these deals involves demonstrating value-add capabilities to outmaneuver more prolific corporate buyers. Activity is expected to accelerate in the near term due to the pandemic, which has heightened awareness about the need for change.

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• Topics
• North Asia
• Industrials
• Technology
• Buyouts
• Japan
• Nippon Mirai Capital Co.
• manufacturing