CLSA exits Japan parking lot operator to Advantage
CLSA Capital Partners (CLSA CP) has agreed to sell Japanese coin-operated parking lot business Ecolocity to Advantage Partners for an undisclosed sum.
CLSA CP acquired 100% of Ecolocity in December 2018 via its USD 400m Sunrise Capital III fund, which targets companies with enterprise valuations of JPY 5bn-JPY 15bn (USD 37m-USD 111m).
The transaction follows closely on Advantage closing its seventh flagship Japan buyout fund on JPY 130bn with a view to exploiting the local labour shortage among other themes. It also comes amidst a perceived uptick in sponsor-to-sponsor transactions locally.
“There are a lot more private equity-owned companies in Japan compared to 10 years ago. In addition, the IPO markets are weak, so many companies are waiting for them to reopen,” Shinichiro Kita, a senior partner at Advantage responsible for buyouts told AVCJ last week.
“Some GPs need to show distributions to LPs, so they have already decided to sell to strategics or private equity.”
Established in 1996, Ecolocity operates and manages time-charge coin-operated parking lots under the Ecolopark brand, as well as monthly contracted parking lots. It has 4,266 locations nationwide and 129 employees as of end-2022.
There are plans to pursue expansions across the Tokyo, Kansai, Fukuoka, Sendai, and Nagoya areas. The company claims on its website to have achieved annual growth of more than 10% without specifying the timeframe. Sales amounted to JPY 11.4bn during the 2022 financial year.
Recent traction has focused on greater implementation of technology, including electric vehicle charging stands. Value-add work during the CLSA CP holding period includes the development of cashless payments systems and the use of digital signage.
“Furthermore, Sunrise III has contributed to an improvement in the company's management structure and assisted the company in achieving its business growth strategies,” CLSA CP said in a statement.
“Growth has been achieved by strengthening the company’s organisational structure, and enlarging the role of human resources to support expanding regional business and the establishment of new offices.”
Advantage said it intends to support the business by leveraging its experience in real estate-related companies such as condominium management player Community One and home renovation company Katitas. These companies were exited in 2013 and 2017, respectively.
This is not the first time CLSA CP has exited an asset to Advantage. In another apparent play on Japan’s labour theme, Sunrise II sold industrials sector human resources outsourcing business Qit to Advantage in 2020. CLSA CP described the company’s growth during its hold as “exponential,” citing four bolt-ons and several operational improvements.
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