Advantage, Bain among bidders in final round of Yayoi auction
Advantage Partners, Bain Capital and financial services firm Orix Corp. have reportedly advanced into the final round of bidding for MBK Partners-owned Japanese accounting software developer Yayoi, which is expected to be one of the biggest sales in the market this year at about $800 million.
Previous reports cited the involvement of both KKR and Olympus Capital Partners in the auction, which started last month. Sources told Reuters that final bids are due November 21 for the remaining participants.
South Korea-based MBK purchased the asset for JPY71 billion (then $611 million) in 2007 at the height of the leveraged buyout boom, marking its first foray into Japan. Reports last month suggested that MBK could earn anywhere between $977 million and $650 million on the sale - with sources now saying the figure is closer to $800 million - which sees MBK poised for a strong return on its investment.
A Nikkei report from 2007 noted that MBK paid a high price for Yayoi, which at the time had less than 100 staff and an EBITDA of around JPY4 billion. If that figure was accurate, MBK's price translates to 18x earnings. Yayoi's EBITDA for the past year reached JPY5 billion, and an $800 million bid would translate to 12.5x EBITDA.
Also at the price of $800 million, Yayoi could mark Japan's third-largest private equity deal of the year, following Bain's acquisition of restaurant manger Skylark for $2.1 billion in equity last month, and the sale of steel bearings maker Tsubaki Nakashima to Carlyle for $856.9 million in March.
Bain's participation in the auction marks its second attempt at purchasing a leading software player in recent months. In August, it acquired Australian accounting software developer MYOB from Archer Capital and HarbourVest, beating KKR and UK software maker SAGE.
Advantage, meanwhile, is looking to take a stake in Yayoi for the second time. It invested an undisclosed amount in the company in 2003 and divested its shares to Livedoor as part of its buyout of the firm in 2004. Livedoor sold Yayoi to MBK in 2007.
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