MBK finds Japanese diamond in the rough

Ikuo Kimura, the founder of Invoice; Toshiyuki Takazoe, President and Representative Director; and Shunji Matsuyoshi, MD collectively own 14.94% of the company and have already agreed to sell their portion to MBK. The MBO kicked off last week and will be completed on January 24, 2011. Subsequently, MBK plans to delist the company from the JASDAQ of the Tokyo Stock Exchange, where it has been listed since February 2002. Post-buyout, Invoice management will hold a percentage of shares in the private company, though the stake remains unconfirmed by either party. Deutsche Securities has been appointed financial advisor, while TMI Associate has been serving as legal advisor to Invoice.

A 100% buyout of Invoice puts the transaction value at JPY17.5 billion ($211.3 million), given MBK’s per share price of JPY1500 ($18.10). The offer represents a 37% premium over the stock’s three-month average closing price, a valuation that the more than 60,000 individual shareholders are likely to accept.

MBK has used senior loans of 12.5 billion ($151 million) provided by Sumitomo Mitsui Bank to finance the acquisition. A Japanese GP unrelated to MBK told AVCJ that despite the headlines and Japan’s economic troubles, Japanese lenders did not completely close the doors on lending, and it is possible for established players to be approved for loans for PE investments. He also emphasized that Japanese SME investments are one of the key drivers that will help to bolster PE activity in the country.
Invoice explained publicly that the need to delist was instigated by market dynamics. Invoice’s niche industry has becoming more competitive and rapid changes in the telecommunications business environment in the midst of economic uncertainty have made selling to a private equity investor with experience in operational improvements a compelling option.

Founded in 1992, Tokyo-based Invoice Inc. offers consolidated billing services that aim to reduce administrative costs and improve expense management capabilities by consolidating communications bills from virtually all communication service providers. It also provides communications services to residential customers in apartments and other multi-unit residential dwellings.

In anticipation of further downward pressure on target sales and profits going forward, the invoice management team indicated that the business would need a solid management structure and foundation to enhance its core business.

MBK Partners has approximately $3.7 billion under management and is active in investments in Japan, Korea, and China. 

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• Topics
• North Asia
• Buyouts
• Support services
• MBK Partners