Coke picks up Japan’s Q’sai juice maker

The exit plan for the two groups emerged in January this year, however industry sources said that discussions began even earlier.

Daiwa’s private equity arm, formally known as Daiwa SMBC Capital, and the private equity arm of Mizuho Security Group, Nippon Industrial Partners bought a 97.9% stake in the company in 2006 for JPY60 billion ($710 million) via an MBO of the Q’sai’s founding Hasegawa family. The deal was financed using mezzanine debt provided by the Development Bank of Japan.

At that time, Q’sai, which is based in Fukuoka, was looking at a trade sale to industry peers, however the price range appeared to be too high and eventually the company decided to go through a restructuring process to seek further growth under a private equity team.

Following Daiwa and Polaris’ recent announcement of their intended exit, Q’sai attracted attention from local private equity firms including Carlyle Group, Unison Capital and CVC Capital, though the firms ultimately chose a corporate buyer. Although buyout activities in Japan have not recovered significantly from the downturn, sound deals can still earn the support of lenders, said local private equity sources.

Once source told AVCJ that the Q’sai’ exit was not easy due to numbers of issues that are difficult to control. “Q’sai is very dominant in Kyushu where the company started its business. Even though it is owned by PE players, people [influential to] the company’s business did not want to sell it to a company which is non-local; they wanted a buyer from Kyushu.” This kind of pressure often comes from a Japanese corporate culture that is highly influenced by founders and the people around them.

At the end of the day, Q’sai will operate under a larger corporation with significant experiences in the beverage business without losing brand name. This should be a happy ending. The deal is slated to be finalized by October.

Q’sai’s main product, known as “Aojiru”, meaning green soup, is a Kale-based green vegetable juice, touted for its nutritional value. The company was established in 1965 and started developing Aojiru products in 1982. Today it produces not only vegetable juice, but also other health products, such as soups, shampoo, supplements and hyaluronan collagen contained in beauty products. 

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• Topics
• North Asia
• Consumer
• Exits
• Buyout
• Polaris Principal Finance
• Daiwa Securities SMBC Principal Investments