Bain targets $102m Japan advertising take-private
Bain Capital has won board approval from Net Marketing, a Tokyo-listed online advertising and media management business, for a take-private that values the company at approximately JPY 13.6bn (USD 102m).
Separately, Integral Corporation has launched a tender offer for Shinoken Group, which has interests across construction and real estate, energy, and aged care, while Advantage Partners has completed its acquisition of another Tokyo-listed company, customer relationship management platform Pipedo HD.
Bain is participating in the Net Marketing deal through its fourth pan-Asian fund, which closed on USD 4.65bn in late 2018. This is the firm's second tender offer for a Japanese media business in four months, following a successful process for Tri-Stage, a specialist in marketing campaigns for TV shopping.
It is looking to acquire 13.3m shares for JPY 900 apiece, with a minimum acceptance threshold of 8.83m shares, or 54.91%, according to a filing. Net Marketing's stock closed on JPY 552 on August 10, which equates to a market capitalisation of JPY 8.3bn.
Kunihisa Miyamoto, Net Marketing's founder, president, CEO, and largest shareholder, and Takahiro Nagano, his co-founder, have agreed to sell 5.28m shares. Nagano is retaining 500,000 shares and will receive another 1.77m from Macbee Planet, a marketing analytics provider the fourth-largest shareholder in Net Marketing.
Founded in 2004, the company specialises in online and social networking-based advertising and marketing. It also operates Omiai, a mobile dating app.
Net Marketing has struggled with rising domestic competition and talent retention. Miyamoto and Nagano concluded that a full or partial sale to a third party – that could expand the service range and diversify the customer base – was the best way to secure the company's future.
Bain was regarded as an appropriate buyer in part because of its experience in the advertising industry. The private equity firm already owns Asatsu-DK, having privatised the company at a valuation of JPY 153bn in 2017, despite initial opposition from minority shareholder WPP Group.
Net Marketing generated JPY 14bn in revenue for the 12 months ended June 2021, down from JPY 14.4bn the previous year. Over the same period, net income fell from JPY 509m to JPY 336m.
Integral's offer for Shinoken of JPY 1,600 per share gives the company a valuation of JPY 54.7bn. The company's president and largest shareholder has agreed to sell the bulk of his stake. Shinoken is looking to diversify its business by expanding into real estate-as-a-service, taking its real estate agency operation overseas, and making acquisitions in the aged care space.
Advantage acquired a 35.63% interest in Pipedo HD for JPY 7.9bn after 2.8m shares were tendered at a price of JPY 2,800 apiece.
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