Baring Asia exits Net Japan to Orix

The value of the transaction was not disclosed, but a source familiar with the matter said Baring Asia sold the business for 8x EBITDA. Net Japan's operating income for the year ended December 2013 was JPY2.77 billion ($27 million), which implies a valuation in the region of JPY27 billion. 

The private equity firm held an 87.4% stake in the business, having invested an undisclosed sum in March 2012. The entry valuation was said to be 6x EBITDA. Using Net Japan's 2011 operating income as guidance, the enterprise valuation was approximately JPY18.6 billion.

Net Japan is headquartered in Tokyo and was set up by Toshiyuki Yoshi in 1995. The company purchases previously-owned gold, silver, platinum, palladium, diamonds and fine jewelry, which it then sells to refining companies and trading firms. It also manages auction trades in Hong Kong and sells to overseas markets such as China and India

Net Japan trades through 11 branches and has a network of 20,000 buyers nationwide. The company has the market-leading share in gold and diamonds, 60% and 45%, respectively.

Sales for 2013 came to JPY180.7 billion, up from JPY124.9 billion the previous year.

According to a release, Net Japan has spent the last two years working to grow its business and strengthen its management structure.

This strategy has included bringing in new compliance, financial reporting, and key performance indicator systems; acquiring its number two rival Olympic Gold; and building a distribution capabilities in Hong Kong, Bangkok, and Singapore.

"Net Japan is a perfect example of Baring Asia's ability to work with entrepreneurs and management teams to assist them in growing the business, particularly outside of the domestic market," said Tadashi Maruoka, managing director of Baring Asia in Tokyo.

"Net Japan was already an excellent business but we were able to add the financial and operational skills and other capabilities to make the business an attractive acquisition target for a suitable buyer."

The exit comes at a time when Baring Asia is looking to raise around $3 billion for its sixth pan-regional fund - its largest vehicle to date - which is expected to be launched in the coming weeks.

Baring Asia started in investing in Asia in 1997 and currently has more than $5 billion in committed capital. It has offices in Hong Kong, Shanghai, Beijing, Mumbai, Singapore, Jakarta and Tokyo.

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• Topics
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