CITIC Capital exits Japanese bone china maker Narumi

This is the fourth exit for the private equity firm's Japan funds, which focuses on helping Japanese mid-market companies expand overseas, particularly into China. Last month, it sold Higashiyama Film, a maker of coated films for touch screens and flat panel displays, to Otsuka Chemical.

Narumi was founded in 1950 and claims to be Japan's second-largest tableware manufacturer and the first to mass produce and export bone china to the US. The company is headquartered in Nagoya and has sales offices in Shanghai, Hong Kong, Singapore and Indonesia.

CITIC acquired the business in September 2006 through a management buyout from Sumitomo Metal Industries, now known as Nippon Steel & Sumitomo Metal Corporation. The investment came from CITIC Japan Partners, which closed at JPY17 billion in February 2005.

According to AVCJ Research, the PE firm took a 90% stake. An Ishizuka Glass filing indicates that CITIC Japan Partners holds a 68.1% interest in the company, with CITIC Japan Growth Partners owning 28.6%. The remaining 3.3% is held by fewer than 10 individuals.

During CITIC's ownership period, Narumi has faced a decline in consumer demand as a result of the global financial crisis and the 2011 earthquake and tsunami. The company has expanded by strengthening its brand, building up global manufacturing capabilities, and entering the China market.

Net sales came to JPY10.6 billion for the 12 months ended March 2014, up from JPY9.7 billion the previous year. Net profit reached JPY410 million, up from JPY351 million.

"By connecting the strength of Narumi's brand, sales network, customer base, and other managerial resources, we have been able to work with Narumi to grow its business. We expect the growth to continue with their new ownership structure as Narumi and Ishizuka Glass have tremendous synergies in their businesses and company values," Hironobu Nakano, CITIC's Japan head, said in a statement.

CITIC Capital Partners, the private equity arm of CITIC Capital Holdings, operates in China, the US and Japan and manages $2.6 billion in committed capital on behalf of over 60 LPs.

The firm is currently investing its second Japan fund, which closed at JPY18.1 billion in January 2011. Last week it launched a tender offer to acquire a controlling stake in Schott Moritex Corporation, a Japan-based manufacturer of vision lenses for machines.

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• Topics
• Exits
• Industrials
• North Asia
• Exit
• Trade sale
• Japan
• CITIC Capital
• manufacturing