Wise paints the town with Teibow

The sale by the US investment bank attracted several private equity firms, including local players Advantage Partners and Polaris Principal Finance and Mizuho Group's private equity arm. Following the trend of Chinese companies and firms looking to capitalize on well-priced Japanese assets, CITIC Capital Partners also participated in the initial round of bidding.

Wise's eventual win is largely due to its expertise in restructuring, as well as their higher bid. Goldman Sachs's Asia Special Situations Group, known for investing in indebted companies through principal financing, originally acquired an 86% stake in Teibow in 2006 for an undisclosed sum, and later turned it into a wholly-owned portfolio company.

One industry source told AVCJ, "Many mid-cap deals are on the market in Japan, but it is a question of how large funds [are able to] raise money. Wise has a good track record and has great skills in restructuring."

Another source noted that Wise has received international attention in a market that has largely written off Japan-based funds. "Wise Partners is one of several firms that overseas LPs are considering to allocate their capital to," he noted.

Wise has averaged about one investment per year since 2007. In 2008 Wise invested in Asahi Fiber Glass Co. along with Mezzanine Finance and Tsumura Life Science for JPY4.55 billion ($53.6 million). Izumi Products Company, which filed for bankruptcy protection in 2009 with debts of JPY17 billion ($200 million), is also a portfolio company. All of Wise's investments have been made in partnership with the DBJ.

Teibow, a Shizuoka-based company that also has an office in Shanghai, was established in 1896 originally making hats; its core business shifted to pen nib development and manufacturing in 1968. The company makes nibs using felt, but more recently has started to use other materials such as fiber and plastic. These types of nibs are not only used in writing pens, but also cosmetic products, home goods and medical instruments.

Goldman Sachs declined to comment, while Wise Partners was not available for comment at the time of publication.

 

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• Topics
• North Asia
• Buyouts
• Goldman Sachs