CLSA invests in Japanese automotive tools retailer

CLSA is understood to have a picked up a 55-58% stake in Worldtool, while Tsutomu Nakajima - the company's founder - will continue to hold shares and remain as president. Key management, operations and branding will remain unchanged.

Headquartered in Fukaya in Saitama prefecture, Worldtool was set up by Nakajima in 1995 and sells service tools for auto mechanics.

Operating under the brand name Astro Products, the company claims to be Japan's largest specialtiy retailer in its segment, selling its own-branded tools as well as major national brand products through a network of 140 stores nationwide. In addition to auto service tools, its product range includes general industrial tools, LED lights, solar panels, and electric generators.

"It has a unique position in the market and it has high growth potential," Yasunori Maeda, a senior vice president with CLSA in Tokyo, told AVCJ. "Traditionally the maintenance tool market in Japan was driven by pure manufacturers, pure wholesalers and pure retailers. This company is the first to bring a fully integrated value chain model into this market, so it is actually leading growth in this space."

Worldtool has around 730 employees and its sales for the 2014 financial year came to around JPY6 billion. According to CLSA, the company has seen compound annual revenue growth of 20% over the past five years. The GP wants to expand the businesses domestically and overseas, and help prepare it for an IPO.

The investment was made through Sunrise Capital II, CLSA's second Japan-focused fund which reached a final close of $210 million last November. This represents the fourth investment the fund.

Sunrise II was launched at the start of 2012 and made its first investment 16 months later when it bought used-car auction site operator BCN from Chubu Motor Sales for $20 million. Its other investments are a 54% stake in BayCurrent Consulting, an IT business process consulting firm, which was bought for $34.5 million in June last year; and last week's undisclosed investment in Asamiya, a Japanese low-cost food and beverage maker.

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• Topics
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