Carlyle sells Japanese snacks maker to D Capital
The Carlyle Group has exited its 100% stake in Japanese snack maker Oyatsu Company for an undisclosed sum to D Capital after a more than eight-year hold.
Carlyle Japan first invested in Oyatsu in May 2014, taking a more than 51% stake for around JPY 20bn (then USD 194m) via its third country fund, which closed on JPY 119.5bn in 2015.
D Capital is investing via its debut fund, which achieved a third close in October of JPY 27bn (USD 198m) on a target of JPY 30bn. The fund is designed to write cheques in the range of JPY 3bn, targeting companies with enterprise valuations of around USD 100m.
Founded in 1948, Oyatsu is best known for its flagship brand Baby Star, a dried noodle snack meant to be eaten by hand that has been made from noodle manufacturing by-products since 1959. The repurposing of by-products to achieve cost efficiencies is a feature of the business. Other products are made from soybean milk residue from the production of bean curd.
Carlyle noted that there were significant advancements in innovation, operational efficiency, and globalisation during its holding period. These included strengthening management, investment in marketing and R&D, the automation of some manufacturing processes, and expansion into 14 overseas markets.
Consolidated sales for the year ended July 2022 were 25% greater than annual sales at the time of acquisition, according to a statement. During the same period, overseas sales are said to have increased 3x, with a footprint including China, Hong Kong, Korea, and Vietnam. Baby Star has historically represented about 70% of sales.
Carlyle Japan has invested more than JPY 450bn across 35 deals since 2000 with a focus on consumer and media. Standout consumer investments include the JPY52.1 billion acquisition of beer maker Orion Breweries alongside local investment bank Nomura in 2019.
D Capital aims to distinguish itself in Japan’s increasingly crowded middle market as the only private equity firm headed by investment professionals who are also active digital transformation specialists. The GP was largely spun out from Unison Capital but also sourced talent from the likes of Goldman Sachs and MBK Partners.
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