MBK Partners sells Japan-based Invoice to Lone Star

Invoice, then listed on JASDAQ, accepted a tender buyout offer from MBK, acting in partnership with company management, in December 2010 and the transaction closed two months later. Three Invoice executives, including Ikuo Kimura, the company's founder, sold their collective 15% stake to MBK as part of the deal. Under the new ownership structure, the management team held a small minority stake.

The offer valued Invoice at JPY17.5 billion (then $211.3 million) - a 37% premium to Invoice's three-month average closing price - with MBK sourcing JPY12.5 billion in leveraged financing from Sumitomo Mitsui Bank. The equity contribution came from MBK Partners II, a 2008 vintage fund that closed at $1.6 billion.

It was reported earlier this year that MBK had hired Nomura to organize the sale of Invoice, which had an estimated value of JPY30 billion ($293 million). The private equity firm realized 70% of the invested equity through a leveraged recapitalization, worth $100 million, in April 2012.

Founded in 1992, Tokyo-based Invoice started out as a call-back service provider, facilitating low-cost international calls. In the mid-1990s it moved into integrated enterprise communication services, calculating charges for telephone and internet use. By consolidating billing services from a range of communication providers, the company is able to reduce administrative costs and improve expense management capabilities for customers.

Invoice listed on JASDAQ in 2002 and claims to have a 35% share of Japan's telecom bill aggregation market, aggregating bills for 870,000 lines for more than 20,000 customers. It formed an alliance with Softbank Group in the 2000s and remains the company's number two reseller. Invoice also provides internet and voice-over internet protocol services to niche market segments.

According to the sources close to the deal, MBK nearly doubled the company's EBITDA during its ownership period.

MBK recently closed its third fund at the revised hard cap of $2.7 billion, after less than one year in the market. The private equity firm has completed four of the region's largest buyouts of 2013 in water purifier manufacturer Coway - announced in 2012 but closed in early 2013 - ING Life Korea, clothing retailer NEPA and Japan-based Komeda Coffee.

Taiwan media reported that MBK may also finally exit cable TV provider CNS, which it bought in 2006. Ting Hsin International Group, parent of instant noodle maker Tingyi Holding, is said to be running due diligence on the company. A previous attempt to exit via a trade sale - to Want Want China Holdings - met regulatory opposition while plans for a business trust listing also failed to come to fruition.

Lone Star closed its eighth fund, which seeks investments in the US, Western Europe and Japan, at $5.1 billion in May. Earlier this year Lone Star and other creditors-turned-shareholders agreed to sell Tokyo Star Bank to Taiwan's Chinatrust Commercial Bank for JPY52 billion. They assumed control in 2011 after previous owner Advantage Partners defaulted on debts tied to its acquisition.

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• Topics
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