Bain pursues $147m acquisition of Japan's System Information

Bain has offered to acquire all outstanding shares at JPY 930 apiece, representing an 18% premium to the closing price on September 27. The stock reached an all-time high of JPY 1,608 in mid-2020 but has generally trended down to date. The company currently has a market capitalisation of JPY 17.4bn. The board has recommended the MBO to shareholders.

The minimum threshold is about 11.8m shares or 51% of the 19.4m shares planned to be acquired. The only remaining shareholder will be the founder, who will retain a 15.7% position via two entities, according to a filing. The transaction is expected to be finalised within the year.

Founded in 1980, SI&C provides corporate IT infrastructure support across internet, intranet, web application services, software development, mobile app development, and cloud. There are also competencies in artificial intelligence, including voice and image recognition and natural language processing, as well as internet-of-things and data analytics.

Sales rose 12.7% during the 2022 financial year to JPY 14.6bn, while net profit improved 13.4% to a record JPY 1.2bn. The company attributed the performance to increased adoption of digitalisation related to the pandemic and general economic uncertainty. The fastest-adopting industries included distribution services and government offices.

Recent activity includes an expansion of key subsidiaries with a view to pursuing growth through M&A and the commencement of English-language disclosures. The latter has increased foreign ownership in the company from 4.9% in 2021 to 8.4% in 2022.

The company expects sales to increase 5.8% to JPY 15.5bn in 2023, although profit is projected to decline 5.9% to about JPY 1.3bn amidst new investments in education and human resources, including the planned recruitment of digital transformation engineers. Headcount has tripled since the company went public in 2013 and is currently 940.

Bain was active in Japan’s software and IT space as recently as May, when it acquired IDAJ, a specialist in engineering services around computer-based design work, for an undisclosed sum. In April, the private equity firm ceded co-control of HR software provider Works Human Intelligence to GIC in a deal reportedly worth JPY 350bn.

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• Topics
• North Asia
• Support services
• Technology
• Buyouts
• Japan
• Bain Capital Asia
• digitalization