J Trust To Be New Sponsor Of Failed Takefuji

Takefuji Corp., a failed consumer loan company, announced that it made a new sponsorship agreement with J Trust Co., Ltd., a listed consumer lender. Korean financial institution A&P Financial Co., Ltd., once the sponsor of Takefuji, failed to meet the obligations under the sponsorship agreement. US buyout shop TPG Group was a the next best candidate after J Trust. Takefuji went bankrupt in September 2010.

Unizon Capital To Acquire Asahi Tec Via Tender Offer

Unizon Capital Inc., a major private equity firm, announced that Unizon Capital, through its fund and investment vehicle, made a two-step tender offer for Asahi Tec Co., an auto-based components manufacturer. The first TOB price is set at 27 yen, a 17.39% premium over a 3 month average, for the major shareholders, Ripplewood Holdings Japan (RHJ) International and Tokyo Marine & Nichido Fire Insurance Co. They agreed to the offer. Later, the second TOB price was set at 33 yen, a 43.48% premium over a 3 month average, for general shareholders. RHJ International started to invest in May 2003.

Wise Partner To Exit Investment In Bath Salt Maker

Earth Chemical Co., a listed major manufacturer in home-use insecticides, announced it has reached a share transfer agreement with Wise Partners, a mid-market private equity firm, to acquire a 80% share of Bathclin Corp., one of the major bath salt makers, for about 15 billion yen in order to increase its market share. Earth Chemicals, belonging to Otsuka Pharmaceutical Group, is also a major player in the bath salt market. Bathclin was divested from Tsumura Group, a Kanpo-based medicine manufacturer, with Wise Partners in August 2008.

Kyocera To Acquire PE-backed LCD Manufacturer

Kyocera Corp., a major comprehensive ceramics manufacturer, announced that it has completed a share transfer agreement with Japan Industrial Partners (JIP), Inc., a mid-sized private equity firm, to acquire all shares of Optrex Corp., a specialized manufacturer of liquid crystal displays and related products, in order to further strengthen and expand its LCD and touchscreen panel business. JIP purchased all shares of Optrex from Asahi Glass Co., Ltd. and Mitsubishi Electric Corp. in February 2008 because Optrex has been a joint venture of both companies.

LaSalle Logistics Fund To Exit Most Investment To GLP and CIC

LaSalle Investment Management Inc., a global real-estate investment firm, announced that LaSalle has sold almost all the assets of Japan Logistics Fund 1 to Global Logistics Properties (GLP), a Singapore-listed logistics specialist. GLP and China Investment Corp. (CIC), a sovereign wealth fund, purchased 15 logistics warehouses for $1.6 billion from the fund. The fund was launched in 2004 and targets Japanese logistics properties for international investors. LaSalle still manages Japan Logistics Fund 2, which was raised in 2008.

Cram School To Go Private Via MBO

WAO Co., a major cram school operator, announced that WAO has approved a tender offer from an investment vehicle set up by its founding CEO, Akio Nishizawa. The founding family holds a 53.55% share. The TOB price is 245 yen, a 102.5% premium over a 3-month average. Mizuho Bank, Bank of Tokyo Mitsubishi-UFJ, Risona Bank and Sumitomo Trust Bank are ready to provide up to 6.2 billion yen in financing.

HORIPRO To Go Private Via MBO

HORIPRO Inc., a listed major talent agency, announced that HORIPRO approved a tender offer from an investment vehicle set up by its founding family, the Horis. The TOB price is at 1,050 yen, a 61% premium over a 3-month average. Mitsui Sumitomo Bank is ready to provide up to 8.45 billion yen in financing. HORIPRO will be delisted upon the successful outcome of the deal.

FUJIFILM To Acquire SonoSite via Tender Offer

FUJIFILM Holdings Co., a diversified technology company operating in healthcare, highly functional material and document solutions, announced that Fujifilm reached an agreement with SonoSite Inc., a pioneer and leader in bedside and point of care ultrasound technology, pursuant to Fujifilm's acquisition of SonoSite for $995 million. Fujifilm will make an all-cash tender offer to purchase all outstanding shares of SonoSite common stock for $54 per share in cash. The TOB price is a 50% premium over its 3-month average.

Meiji Yasuda Life To Tender Offer For Polish Insurance Company

Meiji Yasuda Life Company, one of Japan's major life insurance companies, announced that Meiji Yasuda and Talanx AG, the third largest Germany insurance group, will make a tender offer for Europa Group, an insurance unit of Getin Holding, the foremost private financial group in Poland. Meiji Yasuda and Talanx agreed on a strategic cooperation consisting of capital and business alliances about a year ago. They will continue to cultivate markets in developing countries together.

Machine Tool Orders Up 15.9% in Nov

The Japan Machine Tool Builders Association released that machine tool orders rose for the 24th straight month in November, increasing 15.9% on the year. Domestic demand was up 22% while foreign demand was up 13% mainly because of the flooding in Thailand which severely hurt Japanese manufactures.

UPGARAGE To Go Private via MBO

UPGARAGE Co., a used car/bike parts shop chain operator, announced that UPGARAGE has approved a tender offer from an investment vehicle set up by Makoto Ishida, the CEO of UPGARAGE. The TOB price is 50,000 yen, a 34% premium over its 3 month average. Mitsui Sumitomo Bank is ready to provide up to 1.3 billion yen in financing. The FC operator will be delisted upon the successful outcome of the deal.

Nikko Asset To Postpone IPO

Nikko Asset Management Co., Ltd., a Tokyo-based asset management company, announced that Nikko Asset has decided to postpone its pending public offering due to current stock market conditions and other factors. Nikko Asset is scheduled to be listed on the 15th of December.

Secured Capital To Invest In Real Estate With Aviva

Secured Capital, a real estate unit of PAG, one of the region's largest Asian-focused alternative investment managers, will set up a fund with Aviva plc. to invest mainly in commercial buildings located in the Tokyo area. Aviva is the world's sixth largest insurance group, according to The Nikkei. They have fund raised about $120 million from European investors so far and plan to raise up to $250 million by next spring. With leverages from banks, they are considering investing a total of $500 million in Japanese real estate.

Polaris To Invest In Transportation Company

Polaris Capital Group Co. Ltd., a middle market-focused private equity firm, acquired Kanto-Unyu Co., a private trucking company, for an estimated 5 billion yen, according to The Nikkei. Polaris bought shares from Kanto's parent company. Kanto has 15 billion yen in consolidated sales and 1,500 employees.

Mizuho Capital Partners To Exit Investment In Machinery Trading House

Shinsho Corporation, a listed trading unit of Kobe Steel Group, announced that Shinsho has acquired shares in Matsubo Co., a PE-backed machinery-based trading company, and made it a subsidiary. Matsubo was divested from Ebara Corporation, a listed time-honored manufacturer of pumps and air blowers, via MBO with Mizuho Capital Partners, a middle market-focused private equity firm, in 2007. Mizuho held a 85.7% share and has agreed to sell it all.

Tokio Marine Capital To Exit Investment In MIKI SHOKO

Tokio Marine Capital Co., Ltd., an one of major private equity firm in Japan, announced that it sold its entire equity stake in MIKE SHOKO Co., Ltd., a children-focused apparel company, to business partners of MIKI SHOKO. They are Nisshinbo Holdings Inc., N.I. Teijin Co., Ltd., KONDO COTTON SPINNING Co., Ltd., Tamurakoma & Co., Ltd., Kurabo Industries Ltd., and Shogakukan-Shueisya Productions Co., Ltd.. TMC invested in MIKI SHOKO in August 2006 through a third-party allotment.

AP To Invest In Eyewear Chain Operator

Advantage Partners, LLP., a major private equity firm, announced that AP reached an agreement with Meganesuper Co., Ltd., a listed eyewear chain operator, to acquire a stake through a private placement and to provide a loan with a warrant. Meganesuper has had a very hard time in fierce price competition and ended up with losing grounds recently. This investment will be implemented with certain conditions like approval at the stockholders meeting etc.. Meganesuper will maintain its listing status.

Nikko Asset To Go Public

Nikko Asset Management Co., Ltd., a Tokyo-based asset management company with AUM of $154 billion, announced that Nikko Asset list its shares through a 45.5 billion yen ($590 million) initial public offering on the Tokyo Stock Exchange on December 15. This is the second largest IPO deal next to Nexon. Sumitomo Mitsui Trust Holdings, which acquired Nikko Asset from Citigroup in 2009 and now owns 91.3%, will offload part of its shareholdings. Nikko Asset recently bought Singapore's DBS Asset Management and Australian firm Tyndall Investment plans to be a major Asian asset management company.

Nexon To Go Public

Nexon Co., an Asian on-line game entertainment company, announced that Nexon will be listed on The Tokyo Stock Exchange on the 14th of December. The Korean-based game developer recently moved its headquarters from Seoul to Tokyo. This IPO wil be the biggest one in 2011, with raising $1.3 billion (100 billion yen ) from the listing. Nomura Securities, Morgan Stanley and Goldman Sachs will handle the deal.

Sodick Plustech To Go Private Via Tender Offer By Parent Company

Sodick Plustech Co., Ltd., a listed manufacturer of resin processing machines, approved a tender offer by its parent company Sodick Co., Ltd., a listed manufacturer of NC electrodischargers. Sodick holds a 64% shares in Sodick Plustech. The TOB price is set at 210 yen, a 38.16% premium over a 3 month average. Sodick Plustech, listed on the Jasdaq market in Aug 2001, will be delisted upon a successful outcome of the deal.

Cannon Marketing To Tender Offer For Showa Inf. System

Cannon Marketing Japan Inc., a marketing unit of Cannon Group, announced that Cannon Marketing has made a tender offer for Showa Information System Co., a listed printing-based solution provider. The TOB price is set at 200 yen, a 81.82% premium over a 3-month average. Mars Engineering Corp., the Showa Information's largest sharholder, agreed to tender their shares. This is a second deal for Cannon Marketing to merge a listed company via a tender offer.

Hokkaido-based Hotel Operator To Go Private Via MBO

Karakami Kankoh Co., a listed Hokkaido-based hotel chain operator, announced that Karakami Kanko approved a tender offer by an investment vechile set up by its current CEO and the founding family. The TOB price is set at 120 yen, a 36.4% premium over a 3-month average. The Hokkaido Bank is ready to provide as much as 880 million yen in financing. Karakami Kanko has been in troubles financially from sluggish sales for years.

GameOn To Be Delisted Via Tender Offer

GameOn Co., a listed provider and developer of on-line games, announced that GameOn approved a tender offer by its top shareholder, NEOWIZ Games Co.. The TOB price is set at 88,300 yen, a 45.6% premium over a 3-month average. NEOWIZ is a major online game servicer in South Korea, from which GameOn deals mainly in imported games.

Shinkin Central Bank To Form Y5bn Fund For Quake-hit Firms

Shinkin Central Bank, the umbrella body for credit associations, or shinkin banks, plans to launch a 5 billion yen investment fund to help revitalize small vusinesses hurt by the March 11 earthquake disaster, according to Nikkei. Shinkin Central Bank and its venture capital firm Shinkin Caital Co. will set up this new fund in mid Decmber.

Average Group Annuities Investment Inked -8.92% In The First Half of 2011

The average return for group annuities in special accounts which Japan's six largest insurers invest in on behalf of corporate pension funds was minus 8.92% in the first half of fiscal 2011, compared with minus 6.75% a year earlier, according to Nikkei. The another poor performance in investment return is mainly attributed to a drop in domestic stock prices and the yen's sharp rise hurting investments in foreign bonds.

Loan Star To Exit Stake In Golf-course Operator

PGM Holdings K.K., a listed major golf course operator, announced that PGM approved a tender offer by Heiwa Corp., a listed manufacturer of amusement machines. The TOB price is set at 52,000 yen, a 30.31% premium over a 3 month average. Its largest shareholder, Lone Star Fund, ageed to sell its entire stake(61%) in PGM. The US investment fund took it public in 2005.

Yamato Material To Go Private Via MBO

Yamato Material Co., Ltd., a listed supplier of a wide variety of containers and materials, announced that Yamato approved a tender offer by an investment vehicle set up by the CEO and other founding family members. The TOB price is set at 585 yen, a 41.62% premium over a 3-month average. Mizuho Bank is ready to provide up to about 2.4 billion yen in financing. Yamato will be delisted upon the successful outcome of the deal.

Nomura To Sell Stake In Skylark To Bain Capital

Nomura Holding. Inc., an one of major securities group in Japan, announced that Nomura Principal Finance Co., Ltd., an investment unit of Nomura group, and NPF-Harmony, a subsidiary of Nomura Principal, have agreed with Bain Capital Partners, a global buyout shop, to sell their entire stake in Skylark Co., Ltd., a family-restaurant chain operator. Nomura plans to sell 77.76 % of Skylark's outstanding common shares for 100 billion yen and its entire holdings of preferred shares for 28 billion yen. Skylark was delisted via MBO with Nomura in 2006.

Stockholding Ratio At Corp Pension Funds Hits Record Low

The ratio of Japanese stocks held by major domestic corporate pension funds stood at a record low 16.8% at the end of August, less than half the December 1999 peak of 36.6%, accordinf to the Nikkei. Since the combined ratio for domestic bonds and general-account assets with guaranteed interest rates increased 1.5% to a record high 49%, many pension funds appear to have shifted their assets to the relatively stable bond market to escape falling share prices at home and abroad.

Major Ad. Company To Launch Tender Offer For Outsourcing Company

Hakuhodo Inc., a listed major advertising company, announced that the ad. agency will launch a tender offer for shares of Backs Group Inc., a listed retail-oriented outsourcing company. The TOB price is set at 2,500 yen, a 49.53% premium over a 3 month average. The CEO(the largest shareholder) and his group approved the offer. Hakuhodo will beef up the marketing solution business through this acquisition.

PE-backed Real Estate AM To Delist via Tender Offer

MK Capital Management Co., a listed Unison-backed real estate asset management company, announced that MK Capital approved the tender offer from an investment vechile by Unison Capital group, a major private equity firm. The TOB price is set at 35,000 yen, a 68% premium over a 3 moth average. MK will be delisted upon the successful conclusion of this deal. Unison Capital group previously made a tender offer in Feburary 2010 and became the largest shareholder(61.3%).

Software Developer To Acquire Fukuoka-based Peer

Mamezou OS Holdings Co., Ltd., a listed software developer, announced Mamezou will make a tender offer for shares of JM Technology Inc., a Fukuoka-based technology solution company. JM Technology approved the offer. The TOB price is set at 70,000 yen, a 127.56% premium over a 3 month average. Mamezou will expand the business area geographically as well as get into the semiconductor business through this transaction. JM Technology provides semiconductor engineering services and FA solution services in addition to the software development.

Hitachi Group To Acquire South African Data Center Provider

Hitachi Ltd, a leading global electrical company, announced that its wholly owned subsidary, Hitachi Data System Co. acquire Shoden Date Systems, a leading provider of date center technology solutions in South Africa and across the sub-Saharan African continent. The California-based IT solution provider will be able to serve its growing customer base throughout the region better with Shoden.

Sumitomo Mitsui Bank To Tender Offer For Promise

Sumitomo Mitsui Finanacial Group, Inc. (SMFG), one of the major banking groups, announced that Sumitomo Mitsui Banking Corporation (SMBC), SMFG's banking unit, made a tender offer for shares of Promise Co., Ltd., a listed consumer loan company, and subscribed the shares issued by Promise through a Third-Party Allotment. The tender offer price is set at 780 yen, a 29.6% premium over a 3-month average. As SMBC is the largest shareholder (21%) in Promise, SMFG will make Promise a wholly-owned subsidiary through these transactions.

JPMorgan Fund To Acquire Shares In Nippon Gas

Nippon Gas Co., Ltd., a listed retailer of gaseous energy, announced that it will issue new shares and dispose treasury stock through a third-party allotment underwritten by One Equity Partners, an investment banking group of JPMorgan Chase & Co. OEP, paying 10.35 billion yen, will become the largest shareholder (18.53%). The fund plans to contribute to the energy company by proposing overseas investment projects as well as dispatching an executive as a director of the company.

Daiwa Sec. Group To Do M&A Finance Business With Aozoara Bank

Daiwa Securities Group, a major securities house group, announced that Daiwa and Aozora Bank will set up the joint-venture company "Aozora Daiwa Finance Co., Ltd." to accommodate M&A financing. Through this partnership, Daiwa will be the one-stop M&A service provider for financial advice to its related fundings.

Ex-ngi To Set Up The First Venture Fund

Hiroyuki Watanabe, ex general manager of ngi group, a listed internet-focused investment company, founded B Dash Ventures Inc. and set up a "B Dash Fund" which targets a 2.5 billion yen in size by 2012. So far the committed LPs are NTT Investment Partners, NEC Biglobe, Gree, Septeni Holdings, and Mitsubishi UFJ Capital. The B Dash Fund invests in mainly internet-related start-ups and venture companies.

Aeon Bank To Buy Failed Incubator Bank

Aeon Bank, a banking unit of retail giant Aeon Group, is in the final stage of negotiations to purchase the failed Incubator Bank of Japan, according to The Nikkei. Aeon Bank, which initially targeted retail customers, plans to beef up the corporate finance business for small to midsized companies with this acquisition. The Incubator Bank of Japan went under in September 2010.

SBI To Set Up Fund With the Royal Group In Cambodia

SBI Holdings, Inc., a financial conglomerate, announced that SBI will form a business alliance with the Royal Group, Cambodia's largest conglomerate. As a starter, SBI and the Royal Group set up an investment fund targeting mainly Cambodian companies. The fund size is to be a maximum of US $50 million in total, in which SBI and the Royal Group will each invest US $25 million.

Advantage Partners To Invest In Chinese Telecom Company

Advantage Partners, a major private equity firm, has made a roughly 1.5 billion yen investment in Hisense Multimedia Technologies Co., an optical communication unit of Chinese appliance giant Hisense Group, according to Nikkei. The Japanese mega buyout shop acquired it through a private placement. This is the second Chinese investment for AP.

Heathcare Servicer To Go Private Via MBO With Carlyle

N.I.C. Co., a healthcare-related services provider, announced that NIC approved a tender offer set up by The Carlyle Group and the management of NIC from NC Holding. The TOB price is set at 530 yen, a 59.16% premium over a 3 month average. While the global mega buyout shop will make an investment of 7.08 billion yen, Sumitomo Mitsui Bank is ready to provide up to 5.35 billion yen in financing. This is the second deal for The Carlyle Japan this year.

Foreigners-targeted Souvenior Shop Operator To Go Private Via MBO

RH Travellers Corp., a listed travel-related retailer, announced that RH Travellers approved the tender offer from investment vehicles by the CEO and other directors of RH Travellers. The TOB price is set at 118 yen, a 40.70% premium over a 3-month average. After sales nosedived from the earthquake and nuclear events, RH Traveller couldn't help changing their business model drastically. RH Traveller will be delisted upon the successful conclusion of the deal.

INVEST AD/SBI AFRICA FUND To Make its First Investment in Africa

SBI Holdings Inc., a financial conglomerate, announced that The INVEST AD/SBI AFRICA FUND, a joint venture managed by SBI Holdings Inc. and the Abu Dhabi Investment Company, has made its first investment by participating in the initial public offering of the Bank of Kigali Limited, the largest commercial bank in Rwanda. The Fund was set up in January 2011 and invests in companies located in African countries where significant economic growth is expected.

Mega Retailer To Boost Children Wears With PE-backed Apparel Maker

Aeon Corp., a listed general merchandise store operator, will develop their children's clothing line-up by adding 2 popular brands of Narumiya International Co., a SBI-backed children-focused apparel manufacturer, according to Nikkei. These two brands are Angel Blue and MINI-K. Narumiya was delisted via a tender offer by a SBI Fund in March 2010.

BALS To Go Private Via MBO

BALS Co., a retailer for furniture and interior household accessory items, announced that BALS has approved a tender offer from an investment vehicle set up by the CEO of BALS. The TOB price is set at 100,000 yen, a 44.2% premium over a 3 month average. Sumitomo Mistui Bank and Mizuho Bank is ready to provide up to 12.5 billion yen in financing. Mitsubishi Corp., a major trading house, will invest in the vehicle indirectly and help BALS cultivate overseas markets.

English Retailer To Closing-Out Sale In Japan

Tesco PLC announced that Tesco decided to sell their operations in Japan. The leading English retailer, after reviewing their portfolio in Asia and the performance of their business in Japan, concluded that they cannot build a sufficiently scalable business and focus on their larger businesses in the region. Japan is the smallest of Tesco's international retail businesses.

INCJ To Integrate Small and Medium-sized Display Business of Conglomerates

Innovation Network Corporation of Japan (INCJ), a public-private investment fund, Hitachi Ltd., Sony Co.,and Toshiba Co. announced that they have agreed to integrate their small and medium-sized display businesses, which are operated by subsidiaries of Hitachi, Sony and Toshiba. INCJ and those conglomerates will establish a new company, in which INCJ will be a major shareholder (70%) with Hitachi, Toshiba and Sony at 10% each. INCJ plans to invest a total of 200 billion yen and provide financial, technological, and management support.

2 Real Estate Group Companies To Go Private via MBO

Tachihi Enterprise Co., Ltd., a listed Tokyo-based real estate developer, and New Tachikawa Aircraft Co., Ltd., a listed airplane-parts maker as well as real estate leasing company, announced that both companies have accepted the tender offers from a private firm set up by the CEOs of both companies. They have had cross-shareholdings since New Tachikawa was spun off from Tachihi in 1949. The TOB price for Tachihi is set at 6,300 yen, a 36.67% premium over its 3 month average. The TOB price for New Tachikawa Aircraft is set at 5,200 yen, a 67.21% premium over its 3 month average. Other major shareholders have agreed to tender their shares. Mizuho Bank is ready to provide up to about 83 billion yen in financing.

ETIC To Invest In Troubled Mold Maker

ARRK Co., a listed holding company of DIE & Mold Engineering Co. Ltd., announced that Enterprise Turnaround Initiative Corp of Japan (ETIC), underwrote 150,000,000 common shares issed by ARRK for 9 billion yen. ETIC will be the largest shareholder. As Mizuho Bank and the Bank of Tokyo-Mitsubishi UFJ accepted the debt-equity swap, ARRK will reduce its debt by 20 billion yen. The company, once an aggressive buyer of its competitors, became financially troubled with the decreasing sales and is now under a restructuring process.

Social Game Developer To Go Public For The First Time

KLab Inc., a leading social game developer, announced that KLab will be listed on the Tokyo Stock Exchange on the 27th of September. SBI Group, a financial conglomerate, has invested in this company. It is the first time a social game developer will be listed on the stock exchange in Japan. KLab was founded in August 2000.

Osaka Port Development To Go Private

Osakakoshinko Co., Ltd., a listed Osaka-based port and building management company, announced that Osakakoshinko approved a tender offer by Tasumi Shokai Co., Ltd., a private Osaka-based logistics company. The TOB price is set at 2,650 yen, a 37.7% premium over its 3 month average. Tatsumi Shokai is the largest shareholder of Osakakoshinko. Osakakoshinko will be delisted upon the successful conclusion of the deal.

Mitsubishi Corp To Tender Offer For Food Container Maker

Mitsubishi Corporation, a leading trading company, announced that Mitsubishi will conduct a tender offer for shares of Chuo Kagaku Co., Ltd., a listed major manufacturer of plastic food containers. The TOB price is set at 386 yen, a 2.4% premium over its 3 month average. The major shareholders in Chuo Kagaku agreed to tender their shares. Chuo Kagaku will cultivate a fast-growing market in China with support from Mitsubishi and completely get rid of its non-core businesses like its golf-course development. Mitsubishi plans to convert the food container maker into a consolidated subsidiary through this deal.

Ex-Sanwa GCM Bids For Failed Incubator Bank

GCM Ltd., a Tokyo-based investment bank set up by former Sanwa bankers with a Chinese investment fund, is in the bidding process for the bankrupt Incubator Bank of Japan. Another competitor is AEON Bank, the banking unit of AEON Group, a major retailing group. The auction conductor, Deposit Insurance Corp. of Japan, will select a sponsor by September. The SME-targeted Incubator Bank of Japan filed for Chapter 11 last September.

Murata Machinery To Launch Tender Offer For silex technology

Murata Machinery Ltd., a private machine tool manufacturer, announced that it has launched a tender offer for Silex Technology Inc., a listed network-related solution provider. The TOB price is set at 58,000 yen, a 72% premium over its 3-month average. Silex approved the offer. Murata Machinery, using Silex's wireless technology, plans to develop the FA system, aiming for higher productivity.

INCJ To Establish Japanese Contents Exporter

INCJ, a public-private investment fund, announced that INCJ set up the new company "All Nippon Entertainment Works Co., Ltd." which will remake Japanese stories, characters, etc. and undertake planning and development activities targeting the global market. INCJ has decided to make a 6 billion yen investment. The new company will work with "Collaboration Partners" like an advertising agency, film/cartoon makers, TV broadcasters, toy makers, and trading companies.

Unified Partners To Exit Investment In Home Builder

Yamada Denki Co. Ltd., a leading volume home appliance retailer, announced that Yamada will launch a tender offer for SXL Co. Ktd., a PE-backed custom home builder. The TOB price is set at 65 yen, the same as its 3 month average. Yamada plans to keep SXL listed on the exchange. Unified Partners, one of the investment units of Nomura Securities Group, made an investment in 2005 and decided to tender their shares in this offer.

CAS Capital To Exit Investment In Restaurant Chain Operator

H2O Retailing Co., a holding company of Hankyu Hanshin Department Stores Group, announced that H2O will conduct a tender offer for Kazokutei Co., Ltd., a PE-backed Japanese food restaurant chain operator. The TOB price is set at 750 yen, a 45% premium over its 3-month average. CAS Capital, a Tokyo-based midsized private equity firm, made an investment in 2007 and became the largest shareholder (57.1%). CAS Capital approved the offer. H2O plans to strengthen its food business through this acquisition.

PE-backed Materials Maker To Sell Its Wafer Business

Covalent Materials Co., a leading-edge materials maker, announced that Covalent and Sino-American Silicon Products Inc., a major Taiwanese silicon wafer maker, have agreed to transfer Covalent's silicon wafer business to Sino-American Silicon Products. Covalent will concentrate its resoures on its ceramic business. Covalent, formerly Toshiba Ceramics, went private via MBO with The Carlyle Group, a global mega buyout shop, and Unison Capital, a major Japnese buyout shop, in 2006.

Arrow Electronics To Launch Tender Offer For Chip One Stop

Arrow Electronics, Inc. announced that Arrow will launch a tender offer to acquire all of the common stock of Japan-based Chip One Stop, a provider of shopping sites for electronic components and semiconductors for a purchase price of 220,000 yen per share. The TOB price has a 204% premium over its 3-month average. Arrow is a NY-based global distributer of products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Through this acquisition, Arrow can expand its presence in Japan as well as strengthen its e-commerce capabilities.

Higashiyama Film To Go Private With CITIC Japan

Higashiyama Film Co., a Nagoya-based special film maker, announced that Higashiyama Film accepted a tender offer from an investment vehicle set up by CITIC Capital Partners Japan., a Japan-focused private equity firm of CITIC Capital Group. The TOB price is set at 970 yen, a 29.2% premium over its 3-month average. The investment vehicle made a tender offer last May and became the largest shareholder (63.12%). Higashiyama Film will be delisted upon the successful conclusion of the deal.

Nichii Gakkan To Tender Offer For English School Operator

Nichii Gakkan Co., a broad-range service provider in medical support & health care, announced that Nichii Gakkan made a tender offer for GABA, a listed English language school operator, at 2.000 yen, a 77.1 % premium over a 3-month average. GABA approved the tender offer. The Bank of Tokyo Mitsubishi-UFJ is ready to provide up to 10.1 billion yen in financing. Nichii Gakkan plans to expand its education business in English and IT in addition to medical sectors and utilize GABA's e-learning systems through this acquisition.

Nagase & Co. To Sponsor Failed Food Ingredient Maker

Nagase & Co., a listed chemicals-focused trading company, announced that Nagase will sponsor bankrupt Hayashibara Co., an Okayama-based biochemical maker. Nagase won through the bidding process. Other competitiors were CJ Group with Unison Capital, Gun Ei Chemical Industry Co. with Polaris Capital, and JT alone.

MASPRO To Go Private Via MBO

MASPRO DENKO Co., a major TV reception-related equipment manufacturer, announced that it has accepted a tender offer from an investment vehicle set up by the current CEO of MASPRO. The TOB price is at 1070 yen, a 65.1% premium over its 3 month average. Mitsui Sumitomo Bank is ready to provide up to 20.3 billion yen in financing.

Nihon Unisys To Collaborate With PE-backed Software maker

Nihon Unisys, Ltd. a listed system integrator, announced that Nihon Unisys will start a business collaboration with Works Application Co., Ltd., an ERP-focused package software developer and maintenance provider. Works Application went private via MBO with Polaris Capital, a midsized buyout shop, and Karita &Co., a Tokyo-based private equity firm this February. Nihon Unisys will sell products of Works to Unisys's customers and vice versa since they are complementary in their customer bases.

KDDI Group Bot VC-backed Ad Agency Start-up

mediba Inc., a KDDI-affiliated mobile services provider, announced that it has acquired Nobot Inc., a smartphone-focused ad agency. Nobot was founded in April 2009 and has rereceived investments from Samurai Incubate Inc., ngi group, JAFCO and Nissay Capital.

Hony Capital To Invest In Hotel Chain Operator In Japan

Tokai Kanko Co., a listed medium-sized hotel chain operator, announced that Tokai Kanko will allocate new shares to Hony Capital, a China-based private equity firm, for about 1.4 billion yen and set up a SPC with Hony to invest in hotels. Hony will pay 2.7 billion yen for a 40% stake of the SPC. It plans to acquire a hotel located in Osaka from Aetos Japan., a Japan-focused US property fund.

Phoenix Capital To Sponsor Failed Regional Dept Store Operator

Phoenix Capital, a turnaround-focused private equity firm, announced that Phoenix has signed a sponsorship agreement with Nakasan Co. Ltd., a bankrupt Tohoku-based department store operator. Nakasan filed for court protection with debts of 11. 4 billion yen this March. Phoenix starts to make a revitalization plan with Nakasan to acquire its approval from the court.

Mitsui To Do LBO Loans In US With GE Capital

Mitsui & Co. Ltd., a major trading house, announced that Mitsui will provide LBO loans to US companies with help from GE Capital, who made a strategic agreement with Mitsui in November 2010. Mitsui plans to make a portfolio consisting of 20 companies' loans with a total of about US$ 200 million this year. With its investment expertise, the major trading company will also consider managing money for institutional investors in the future.

SMFG To Set Up Funds For Growing Companies

SMBC Venture Capital., an investment unit of SMFG Group, announced that SMBC Venture Capital set up 3 private equity funds for a total of 14 billion yen. They are SMBC Venture Capital Fund #1 (8 billion yen) which is an orthodox VC fund, SMBC Business Development Fund #1 (5 billion yen) which is a buyout fund for SMEs, and SMBC Strategic Investment Fund #1 (1 billion yen) which invests in funds newly set up by universities or corporations. All investment money comes from Mitsui Sumitomo Bank.

INCJ To Invest US$680 Mil In Landis+Gyr

Innovation Network Corporation of Japan (INCJ), a unique public-private investment fund, announced that INCJ will invest in Landis+Gyr AG, a global leader in energy management solutions for utilities, with Toshiba Co., a major comprehensive electrical manufacturer. Toshiba will establish a SPV in Switzerland as a vehicle for the acquisition of Landis+Gyr, capitalized at US $1700 million. INCJ will invest US $680 million in the SPV and secure 40% of its equity as a strategic investment partner.

PE-backed Intelligence To Buy HK Consulting Group

Intelligence LTD., KKR-backed staffing agency, announced that Intelligence acquired Staffing Consultancy Ltd. and its group company, which provide human resource services in HK and mainland China. Intelligence's Chinese operations currently focuses on staffing services. With this acquisition, they will be able to provide comprehensive HR services. The US giant buyout shop KKR acquired Intelligence for $356 million in June 2010. Since then KKR has supported its efforts to cultivate international labor markets.

DRC To Tender Offer For Kojitsu

DRC Capital Ltd., a Tokyo-based midsized buyout firm, announced that DRC will make a tender offer for Kojitsu Co., Ltd., a climbing goods store operator. The TOB price is set at 130 yen, a 35.4% premium over a 3 month average. DRC is the second largest shareholder (17%). Japan Fine Art Co., the laregest shareholder (28%), accepted the offer. The deal size maximum consideration is about 3.14 billion yen.

Kawaijuku Group To Tender Offer for Mainichi Comnet

KJ Holding Co., a holding company of Kawaijuku Education Institution Group, announced that KJ will make a tender offer for Mainichi Comnet Co., Ltd., a student-focused real estate service provider. The TOB price is set at 405 yen, a 27% premium over 3 month average. Mainichi Comnet plans to broaden its customer base, with help from Kawaijuku who provides educational services to teenage students.

Mitsui To Tender Offer For Singpore Port Operator

Mitsui & Co., Ltd., a major trading house, announced that it will conduct a tender offer for Portek International Limited, a SGX-listed port operator. The founding family of Portek, the largest shareholder, accepted the offer. The TOB price is set at S$1.40, a 50.5% premium over a 3 month average. The estimated deal size is S$221 million at a maximum of US$180 million. Portek is a turnkey provider of equipment, services, and solutions for the port industry globally as well as an operator of medium sized container and multipurpose ports. Through this acquisition, Mitsui plans to improve and increase the productivity and efficiency of its logistic operations around the world.

Mitsubishi Corp and China's Creat Group to Set Up JV Funds

Mitsubishi Corp. and China's Creat Group Co. will establish a 50-50 joint venture, MC Creat Fund Management, in Hong Kong to set up funds that will provide capital to Japanese companies aiming to expand their business in China.

The first JPY 10 billion fund will target (i) midsize Japanese companies with strong technologies or brands, but need financial and operational support to tap into the Chinese market. The fund will also invest in (ii) joint ventures between Japanese and Chinese firms and (iii) Chinese companies with the potential to become strategic partners of Japanese companies.

Mitsubishi is establishing a 100% subsidiary, Kizuna Partners, which will source Japanese companies for investments.

Govt Pension Performance Sank To Minus 0.25% in 2010

The Government Pension Investment Fund (GPIF) reported its yield from fiscal 2010 sank to minus 0.25%, a sharp deterioration from the positive 7.91% of the year before. GPIF blamed the weak performance on the falling value of foreign bonds and domestic stocks as a result of the yen's prolonged strength and the March 11 earthquake. The GPIF's assets under management were 116 trillion yen at the end of fiscal 2010.

GOTO To Delist via MBO

GOTO Co., Ltd. a Shizuoka-based roadside chain store operator, announced that it will accept a tender offer from an investment vehicle set up by the current CEO of GOTO. The TOB price is at 395 yen, a 80% premium over a 3 month average. Shizuoka Bank is ready to provide up to 2.5 billion yen in financing. GOTO will be delisted upon the successful conclusion of the deal.

Nippon Life To Invest In Allianz via Convertible Sub. Notes

Nippon Life Insurance Company, the Japanese largest insurer, announced that it will purchase 30-year convertible subordinated notes issued by Allianz Financial Ⅱ B.V., a finance subsidiary wholly owned by Allianz SE, one of the leading integrated financial services provider worldwide. The notes are guaranteed by Allianz and the investment amount well be EUR 500 million.

Asahi Breweries To Tender Offer For NZ beverage Maker

Asahi Group Holding., formerly known as Asahi Breweries Ltd., announced that it will conduct a tender offer for Charlie's Group Ltd., a manufacturer and marketer for premium beverage brands in New Zealand. Charlie's board of directors has recommended that shareholders accept the offer. The TOB price is NZ$ 0.44 per share, a 54% premium to the 3-month VWAP. The acquisition of Charlie's will further strengthen Asahi's overseas beverages business and provide an entry into the New Zealand market.

Industrial Output Rises 5.7% In May

The Ministry of Economy, Trade and Industry announced that the industrial production index in May increased 5.7% from the previous month, showing a gain for the second consecutive month. It showed a decrease of 5.9% form the previous year. The ministry also mentioned that industrial output is on a recovery trend. It said last month that output appeared sluggish at low level due to the earthquake.

Sumitomo Metals To Acquire Standard Steel in US

Sumitomo Metals Industries, Ltd., a major integrated steelmaker, and Sumitomo Corporation, a major trading company, announced that they have agreed to acquire Steel Wheel Corporation, the parent company of Standard Steel , Inc. in the US. Sumitomo Metals will purchase 90% of the holding company's shares while Simitomo Corp will buy the rest. Standard Steel is one of North America's leading manufactures of railway wheels and axles with a history of over 200 years. Through this acquisition, Sumitomo Metals with its core domestic manufacturing bases will enhance its global competitiveness in the manufacture and sale of railway wheels.

Megabanks Boosted Overseas Lending For 1st Time In 2 yrs

Overseas loans by the nation's three megabanks grew for the first time in the two and half years to about 35 trillion yen as of March 31, driven by increased lending in emerging nations in Asia and Latin America, according to Nikkei. There has been strong funding demand for infrastructure construction and natural resource development in emerging nations while there has been sluggish one at Japanese corporations.

Japan-Stock Ownership By Financial Firms Slips Below 30%

Japanese shares held by financial institutions accounted for less than 30% of the total value in fiscal 2010, according to Nikkei. Financial institutions such as banks and life insurers held 29.7% of shares listed on the Tokyo Stock Exchange. While retail investors' ownership remained flat over many years at about 20%, foreign ownership has been increasing year by year to 26.7%.

Dept Store Sales Down 2.4% in May

The Japan Department Stores Association announced that nationwide department store sales fell 2.4% on the year to 482 billion yen. The monthly loss was the third in a row. Although sales generally recovered as consumers regained an appetite to spend after the Great East Japan Earthquake, there were still a lack of demand for luxury items as well as bad weather, which depressed spending.

VC-Backed High Technology Company To Go Publc

Morpho, Inc., an image processing technology-oriented servicer, announced that its common shares have been approved for lisitng on The Tokyo Stock Exchange (TSE) and are expected to begin trading on the TSE Mothers section on the 23rd of July. Morpho was founded in May 2004 with the full support of The University of Tokyo Edge Capital (UTEC). UTEC is an early stage technology focused venture capital firm associated with The University of Tokyo. Morpho is the second investee going public following tella, Inc. for UTEC.

Core Machinery Orders Decline 3.3% in April

The Economic and Social Research Institute, a research unit of the Cabinet Office, announced that private-sector machinery orders, excluding volatile ones for ships and those from electric power companies, decreased a seasonally adjusted 3.3 % in April. The average forecast was around a 1.2% gain. Some economists mentioned that the decline was largely in reaction to gains over the past few months and doesn't represent to a downward trend. The total vale of machinery orders rose by 3.1% in April from the previous month on a seasonally adjusted basis.

KDDI To Tender Offer For Elec. Money Servicer

KDDI Corp., a major telecom company, announced that it will conduct a tender offer for WebMoney Corp., a Jasdaq-listed electric money service provider. WebMoney's board of directors and its largest shareholder, Faith Inc. approved the offer. The TOB price is 327,000 yen, a 38.87% premium over its 3-motnh average. KDDI plans to strengthen its financial services through the takeover.

Tokio Marine Asset to Set Up a Japan-focused RI Fund

Tokyo Marine Asset Management Co., an asset management unit of Tokyo Marine Holdings Inc., will set up an investment fund that will invest in 20-30 mid-cap listed companies in Japan and purse discussions with management to raise the value of the companies, according to Nikkei. Such dialogue is commonly referred to as "Engagement" in the context of Responsible Investment. The fund is to be created jointly with UK proxy voting service firm Governance for Owners and plans to fundraise about 50 billion yen globally.

INCJ To Invest Toshiba-Sony Joint Venture of LCD Panel Ops

Toshiba Corp. and Sony Corp. are in the final stage of negotiations toward unifying operations in small LCD panels for smartphones, tablet computers and other mobile devices, according to Nikkei. The Innovative Network of Japan(INCJ), a public-private investment fund, will take a major stake in the merged entity for more than 100 billion yen.

Sanyo To Sell Full Stake In Homebuilding Op To Ant Capital

Sanyo Electrical Corp. will sell its 19.9% share in Sanyo Homes Co., a midsized homebuilder, to Ant Capital Partners., a Toyo-based private equity firm, according to Nikkei. Sanyo is in the process of merging with Panasonic and divesting some of its duplicate operations. Panasonic holds PanaHome Co., a homebuilding unit of Panasonic group. Sanyo originally acquired its operation from Kubota Co. and aims to sell its solar power systems. But the financially-strapped Sanyo has sold its shares to other companies like Orix Co. and Secom Co. Ant Capital expects Sanyo Homes to be listed in 2012.

Foreigners Net-Buy Japanese Stocks For Record 29th Week

Overseas investors were net buyers of Japanese stocks in the third week of May for a record 29th straight week, according to Nikkei. The Tokyo Stock Exchange disclosed in its weekly report "Investment trend by investor category" that foreign investors have purchased a net 30.5 billion yen worth of Japanese stocks between May 16 and 20, down from 79.6 billion yen the previous week.

AI Capital to Raise First Asia Secondary Fund

Alternative Investment Capital Co. announced that it will raise USD 150 million for its first secondary fund that would focus "exclusively on investment opportunities in the fast-growing Asian region, including China, India, Southeast Asia and Australia." According to the release, the Development Bank of Japan "has made a significant commitment to the Fund as its largest investor." Other investors include Mitsubishi Corporation and Sumitomo Mitsui Banking Corporation. Alternative Investment Capita's majority stake is owned by Mitsubishi Corporation.

LoneStar-Led Syndicate To Acquire All Tokyo Star Shares

US investment fund Lone Star and other creditors that provided funds to Japanese private equity firm Advantage Partners to buy Tokyo Star Bank have reached a broad agreement to gain full control of the embattled bank, according to Nikkei. With Advantage Partners unable to meet its repayment schedule, the Lone Star-led syndicate which also includes Shinsei Bank and France's Credit Agricole SA will exercise rights to repossess all the shares in Tokyo Star from its current owner. Advantage Partners acquired Tokyo Star in 2008 for about 250 billion yen, borrowing 170 billion yen from 20 creditors. But Tokyo Star Bank has been struggling with losses caused by putting aside more reserves for bad loans.

PE-backed Real Estate AM To Implement Roll-Up Strategy

MK Capital Management Corp., a listed real-estate asset management company, announced it has acquired a majority stake (90%) in Atlas Partners Japan Ltd., a real-estate asset management company. Atlas is proud of managing foreign money as well as high captial ratios. As MK Capital increases its AUM to about 300 billion yen through this acquisition, MK will be able to pursue economies of scale and synergies through the unification of complementary functions, business areas, and skill of both companies. Unison Capital, a major Japanese buyout firm, invested in MK Capital in February 2010 and became the largest equity holder (61.3%).

Jan-March Real GDP Annualized -3.7%

The Cabinet Office announced that gross domestic production for the January-March quarter fell 0.9% on the quarter, or an annualized 3.7%. The result was below the average market forecast of a 2.3% contraction. Personal consumption and capital spending are the main detractors. The GDP deflator also fell 1.9% from a year earlier after declining 1.6% in the October-December period.

PE-backed CSO Operator To Acquire Medical Inf. Provider

Apo Plus Station KK(APS), a PE-backed CSO operator, announced that APS acquired a majority shareholding in Synergy International Inc., a Tokyo-based information service provider specializing in the health care and medical science fields. APS, with this acquisition, will create a one-stop service to meet the wide-ranging needs of the pharmaceutical industry. J-STAR Co., Ltd., a Tokyo-based midsized buyout firm, invested in APS in September 2010.

March Machinery Orders Up 2.9%

The Cabinet office announced that private sector machinery orders, excluding volatile ones for ships and those from electric power companies, have increased a seasonally adjusted 2.9% in March. This is a rise of 3.5% in January-March period. The total value of the machinery orders received by the 280 manufacturers operating in Japan has decreased by 15.8% in March from the previous month on a seasonally adjusted basis. In the January-March period it rose by 11.5% compared with the previous quarter. In the April-June period the total amount of machinery orders was forecasted to decrease by 0.3% and private-sector orders, excluding volatile ones, were forecasted to increase by 10% from the previous quarter respectively. This forecast was basically made by summing up the figures from 280 machinery manufacturers.

Failed-Takefuji Signed Sponsorship Agreement With S Korea's A&P Financial

Takefuji Corp., a failed consumer loan company, announced that it has signed a sponsorship agreement with A&P Financial Co., Ltd., a Seoul-based consumer finance company. Since Takefuji filed a petition for the commencement of reorganization proceedings with the Tokyo District Court on September 28, 2010, Takefuji has been searching for a sponsor to achieve early reorganization of our business.

Mizuho Capital Partners To Exit Remaining Shares In SDS Bio. To Idemitsu

Idemitsu Kosan Co. Ltd., Japan's second largest oil distributor, announced it made a tender offer for SDS Biotech K.K. , a PE-backed agrichemical company. Mizuho Capital Partners, a Tokyo-based midsized buyout firm, is a 53.39% equity holder in SDS Bio. and approved the offer. The TOB price is 960 yen, a 92.38% premium over its 3-month average. SDS Bio. went public in 2008. Idemitsu plans to beef up its agrichemical business through this acquisition.

Group Annuities Investment Turn Negative In FY10

The average return for group annuities in special accounts which Japan's six largest insurers invest in on behalf of corporate pension funds was minus 2.64% in fiscal 2010, compared with 18.59% a year earlier, according to Nikkei. The sharp deterioration in investment return is mainly attributed to a drop in domestic stock prices. In addition, the yen's sharp rise to the 76 level against the dollar hurt investments in foreign bonds.

J-STAR To Acquire Machinery-Parts Maker

J-STAR Co. Ltd., a Tokyo-based independent buyout firm, announced that it acquired a majority share holding in Taiheiyo Seiki K.K., a leading manufacturer of construction machinery parts, through Pacific Precision Holding K.K., an investment firm set up by J-STAR. Taiheiyo is proud of its 14 billion yen in consolidated sales from Japan and China as of March 2011. With J-STAR, Taiheiyo plans to expand into other emerging markets such as India and to develop business for other related parts.

PE-backed Jeans Maker To File For Chapter 11

BOBSON & Co.Ltd., a Tokyo-based jeans maker, filed for Chapter 11 with a debt of 734 million yen as of Feb 2011. BOBSON was invested in by Milestone Turnaround Company, a turnaround-focused buyout firm in 2009. BOBSON, once deeply-troubled, was divided into two companies, one was supported by Milestone and the another was newly named "Peachfort Co. ltd." which has dealt with imported-brand clothing. The PE-backed new BOBSON seemed to have recovered at one point, but was said to suffer from diminished sales this year partly because of the March 11th earthquake but mainly because of fierce competition in the price-sensitive jeans market.

BOJ Cuts Forecast For FY 2011 Due to Quake

The BANK OF JAPAN announced in its " Outlook for Economic Activity and Price" report (April 2011, The Bank's View) that its nine-member board now projects 0.6% growth in real gross domestic product for this year, compared with a 1.6% expansion forecast. For the fiscal year on April 1, 2012, it predicts a 2.9% expansion compared with 2.0% growth expected in January. The BOJ also mentioned in the same report that Japan's economy is likely to recover at a faster pace throughout the second half, partly due to a rebound from the first half, on the back of clear increases in exports and production.

J-Star in Another Healthcare Deal

J-Star, focusing on small-mid cap buyouts in Japan, has acquired a majority stake in HCM, KK., which provides in-home care services in Tokyo, Osaka, Hyogo, Aichi and Tohoku areas and operates a care home near Tokyo. HCM has approx. 1,200 employees (incl. part-time staffs) to serve over 100,000 elderly people in Japan. The financial terms of the deal were not disclosed. The debt was provided by Aozora bank.

HCM is the second of J-Star's investments in the healthcare sector following Apo Plus, a contract marketing service provider, in last September. With another transaction, J Star will be exhausting its investable capital.


J-Star press release: http://www.j-star.co.jp/pdf/11-04-28_HCM.pdf
HCM website; http://www.hc-m.jp/eng/.

Canon To Revise Down Yearly Forecast Slightly

Canon, a global high-tech giant, announced that its net profit for the January-March quarter fell 2% on the year to 55.4 billion yen. Sales grew 11% to 839.1 billion yen, driven by strong sales of monochrome copiers in emerging nations as well as robust growth in sales of office equipment.Canon lowered its earnings forecast for the year through December 2011, with sales expected to inch up 1% to just 3.73 trillion yen, 370 billion yen lower than its previous estimate. Net profit will likely fall 11% to 220 billion yen, down from its previous estimate of a 310 billion yen profit.In its quarerly report, Canon has been directly affected by the earthquake including losses form damaged buildings and inventory, and has incurred such indirect effects as electricity restrictions, supply shortages of components and a decline in consumer spending in the Japanese market. These factors and others would negatively affect Canon's operating results and financial position. Canon seeks the restoration of production facilities and rebuilding of production systems.

Cannon Marketing To Tender Offer For Medical Marketer

Cannon Marketing Co., a marketing unit of Cannon Group, announced that Cannon Marketing has made a tender offer for ELK CO., an Osaka-based medical equipments sales company. ELK approved the tender offer. The TOB price is set at 670 yen, a 71.36% premium over a 3-month average. Cannon plans to beef up the medical division through this acquisition.

Ito En Acquired PE-Backed Dairy Maker

Ito En Ltd., a top-ranked beverage company, acquired all shares of Chichiyasu Co., a Hiroshima-based dairy product manufacturer, from J-WILL Partners, a Tokyo-based midsized buyout firm, for an estimated 10 billion yen, according to Nikkei. Ito En plans to expand businesses other than its main green-tea products through this acquisition since Chichiyasu has been renowned for its yogurt products.

KDDI, GREE To Invest $50 mil In Android-related Fund

DCM, a Silicon Valley-based venture capital firm, announced the launch of the world's first Android-focused fund "A-Fund". The A-fund, which targets $100 million, will focus on startups which develop compelling solutions by taking advantage of Android's rapid growth. The A-Fund's anchor investors include GREE Inc., Japan's largest mobile gaming social network, and KDDI Corp., Japan's second largest mobile operator, with each investing $25 million.

March Consumer Confidence Marks Sharpest Fall After Quake

The Cabinet Office announced that the Consumer Confidence Index dropped to 38.6 in March from 41.2 in February. Confidence among Japanese consumers deteriorated after the March 11 earthquake, tsunami, and nuclear disaster. All 4 components of the CCI (livelihoods, income growth, employment conditions, and the timing of new durable goods purchases) marked declines.

Itochu, Sumitomo To Invest In US Wind Project

Itochu Corp. and Sumitomo Corp. have taken roughly 20% stakes in US project The Shepherds Flat project, to build and operate one of the world's largest wind farm in Oregon, according to Nikkei. The two trading houses spent some $200 million apiece to buy their interests from General Electric Co., which previously owned a 90% stake. Google Inc. has bought a roughly 10% stake as well. These alternative-energy investments have been accelerated following the Japan's nuclear disaster.

Tepco To Sell KDDI Shares To Fund Compensation

Tokyo Electric Power Co., plans to sell shares it holds in KDDI Corp., a major telecom company, to help pay the cost of compensating those who have suffered losses due to the accident at its Fukushima Daiichi nuclear power plant, according to Nikkei. Tepco was KDDI's third-largest shareholder, owning about an 8% stake. KDDI's market cap. is about 2.2 trillion yen.

Toyota To Run Operation At Half Volume In Domestic Plants

According to the press release of Toyota Motor Corporation on the 15th of April, as Toyota continues to address its production situation following the disaster, it has decided that vehicle production from May 10 to June 3 will proceed at approximately 50% of its normal rate. Toyota previously announced that 5 European production plants would be suspended for several days in late April and early May to manage available parts supply. In North America, production at vehicle-production/engine and parts plants is to be halted on April 15, 18, 21, 22 and 25. No decisions have yet been made regarding production after April 25.

Cloud Computing Start-up Raised 113 million yen

Midokura Co., Ltd. a cloud-specialized software company, announced it raised 113 million yen from Bit-isle inc., a listed data center, NTT Investment Partners, an investment unit of NTT group, 1st Holding Co,. an AP-backed listed software maker, and other angel investors. Midokura was founded in 2010.

Foreigners Net Stock Buyers For 6th Straight Month

Overseas investors were net buyers of Japanese stocks for the sixth straight month in March, with purchases exceeding sales by roughly 1.18 trillion yen, according to the International Transactions in Securities report by Ministry of Finance. They purchased 28.27 trillion yen worth of Japanese stocks, with sales totaling 27.09 trillion yen. They also were net buyers of medium and long term Japanese bonds for the third straight month with purchases exceeding sales by 498.7 billion yen, while being net sellers of short-term Japanese bonds with sales exceeding purchases by 2.33 trillion yen.

PE-backed Yumeshin To Tender Offer For Fullcast Tech.

Yumeshin Holding Co., a construction-based outsourcing service provider, announced that Yumeshin make a tender offer for Fullcast Technology, a listed light labor staffing agency. The Fullcast Group, a parent company of Fullcast Technology( a 68.6% equity holder), approved the tender offer. The TOB price is set at 35,320 yen, a 28.8% premium over 3 month average. DRC Capital, a Japanese mid-focused private equity firm, invested in Yumeshin in 2007.

S Korea's A&P Financial Likely To Buy Takefuji

A&P Financial Co., a major South Korean-based consumer lender, is expected to gain priority negotiation rights in its move to acquire failed Japanese counterpart Takefuji Corp., according to Nikkei. The other candidates were J Trust Co. , a major Japanese consumer lender, Cerberus Group, US investment fund and TPG Capital, US private-equity firm. J Trust announced that it pulled out of bidding after submitting a 31 billion yen ($365 million) bid. Takefuji filed for bankruptcy protection with 433 billion yen of outstanding debts last September.

Firms Face High Hurdles In Coping With Power Shortage

The Ministry of Economy, Trade and Industry's energy conservation plan goes so far as to limit summer power usage by large-lot customers 25-30%, a tall order for top manufacturers, according to Nikkei. METI's plan, based on an estimated shortfall of up to 15 million kilowatts, aims to avoid rolling blackouts during the peak summer season.

ETIC To Support Hakuyuukai Medical Corp

The Enterprise Turnaround Initiative Corporation of Japan(ETIC), a government-backed turnaround body, announced that the ETIC has decided to provide support to Hakuyuukai Medical Corporation, an Osaka-based medical operator, by requesting financial institutions not to recover loans or exercise any other rights they may have as creditors. Hakuyuukai is a medical corporation that operates a general hospital, a nursing support service, a nursing home for the elderly and a special healthcare facility for suffers of dementia. Oversupply fo hospital beds in the region has made Hakuyuukai being financially troubled. With support from ETIC, Hakuyuukai implements the revitalization plan.

ETIC To Provide Support To ARRK Corp

The Enterprise Turnaround Initiative Corporation of Japan(ETIC), a government-backed turnaround body, has decided to provide support to ARRK Corporation, a listed manufacturer of prototype products, and its subsidiaries. The ETIC shall provide ARRK funding in the amount of 9 billion yen and make arrangements with Japanese financial institutions. ARRK, once aggressive in M&A, couldn't put into place group-wide management systems capable of keeping pace with rapid M&A-driven expansion. Through the ETIC business revitalization plan, ARRK Group will follow a clear business strategy geared toward reorganizing it into a group of companies that generate synergies.

J-Will Partners in Incubator Bank of Japan Auction

J-Will Partners, one of the largest private equity firms in Japan, is reportedly among five or so bidders competing to take over the failed Incubator Bank of Japan. An auction conducted by the Deposit Insurance Corp. of Japan was closed yesterday and the financial reorganization administrator will evaluate the detailed proposals from the bidders, which also included Aeon bank and a Kyoto credit cooperative.

Mizuho Corp Bank To Join In Mega Turnaround Fund

Mizuho Corporate Bank, the investment banking unit of Mizuho Group, will join other major Japanese banks in a business revitalization megafund, according to Nikkei. The fund was established by the Development Bank of Japan, Sumitomo Mitsui Banking Corp., Bank of Tokyo-Mitsubishi UFJ and Mitsubishi Corp. It will be operated by Japan Industrial Solution Ltd., which the banks formed last September.

Mitsubishi Real Estate Buys Tokyo Properties From Lone Star

Mitsubishi Estate Co,. a top-ranked real estate company, acquired an office building and other property in central Tokyo's Akasaka area from US investment fund Lone Star, according to Nikkei. The deal has been valued at roughly 90 billion yen. The earthquake has cast uncertainty on prospects for the office building sector, but Mitsubishi Estate expects that owning property in prime Tokyo locations will help it increase its earnings over the medium and long term.

AvanSrate To Postpone IPO

Following RaQualia, AvanSrate Inc., a PE-backed LCD glass manufacturer, announced that AvanSrate has decided to postpone its pending public offering due to the volatile markets brought about by the Tohoku earthquake. Another newcomer, Semitec Co., a manufacturer of sensor-based electronic components, has also turned down the IPO.

Disaster Damage Estimate At 16-25 Trillion Yen

The Cabinet Office estimates direct damage from the March 11 earthquake and tsunami at 16-25 billion yen, significantly more than the roughly 10 trillion yen from the Great Hanshin Earthquake in 1995, according to Nikkei. The Cabinet Office also indicates that Japan's gross domestic product will likely shrink by 0.2% to 0.5% in fiscal 2011. However, the actual impact on the Japanese economy will likely be larger than the Cabinet Office's estimates as they have not factored in the ripple effects from the trouble at the Fukushima Daiichi nuclear power plant as well as rolling blackouts and dampened consumer sentiment.

More Quake-Damaged Factories Resuming Operations

An increasing number of companies are restarting factories that were temporarily shut down due to earthquake damage, according to Nikkei. Asahi Breweries Ltd, the largest beer brewer, resumed operations on Tuesday at its plant in Ibaraki Prefecture. Hitachi Ltd., the electrical conglomerate, returned to partial operation at three of the seven plants suspended. Kao Corp., the largest maker of lifestyle products, restarted a portion of its Tochigi Prefecture factory that makes paper diapers, one of the most demanded relief supplies. Nikon Corp., a major camera maker, announced that five factories will resume operations Wednesday.

Advantest Lands Deal To Buy Verigy For $907.65 Million

Advantest Corp., Japan's top measuring instrument manufacturer, will purchase US semiconductor testing equipment maker, Verigy Ltd. for 15 dollars a share in a deal worth $907.65 million (or about 74 billion yen) under a basic agreement, according to Nikkei. The acquisition is expected to make Advantest the world's leading supplier of chip testers.

FSA and TSE To Loosen Rules For Reporting Deadlines

The Financial Services Agency and the Tokyo Stock Exchange decided to exempt companies upended by the earthquake from meeting earnings announcement deadlines, according to Nikkei. The FSA and the TSE will ease financial reporting and listing rules, allowing those that fail to submit financial reports by the deadlines to remain listed. The Osaka Securities Exchange is expected to take similar steps.

RaQualia Pharma Inc. To Postpone IPO

RaQualia Pharma Inc., a PE-backed bio venture firm, announced that RaQualia has decided to postpone its pending public offering due to the extraordinary market conditions brought on by the earthquake. There will be a discontinuance of the sale and issuance of stock this time. RaQualia was founded in 2008 via EBO (Employee Buy-Out) from Pfizer Inc., a global pharmaceutical firm, with NIF SMBC Venture Capital and Coller Capital, a European private equity firm. RaQualia will continue its efforts to list on the JASDAQ Growth Market in the near future with the cooperation of The Daiwa Securities Capital Markets Co., Ltd., an investment banking unit of Daiwa Securities Group,.

Mizuho To Buy Brokerage and Trust Bank Units

Mizuho Financial Group, Inc (MHFG)., a listed mega financial group, announced that MHFG has determined the basic policies of turning Mizuho Trust Banking Co., Ltd., a listed trust unit of Mizuho Group., Mizuho Securities Co. Ltd., a listed securities unit of Mizuho Group, and Mizuho Invester Securities Co., Ltd., a listed retail-oriented securities unit of Mizuho Group and Mizuho Bank Ltd., a banking unit of Mizuho Group, into wholly-owned subsidiaries via a share exchange with MHFG. Those listed affiliates will be delisted between late August and early September.

PE-Backed LCD Glass Maker To Go Public

AvanSrate Inc., a LCD glass manufacturer, announced last week that AvanSrate will be listed on The Tokyo Stock Exchange on the 12th of April. The Carlyle Group, a global mega buyout firm, invested in the firm in June 2008 and is the largest equity holder (50.64%). Hoya Corp., an optical technology-oriented manufacturer, is the second largest equity holder (45.67%).

Thank you for your kind support

We would like to thank all of you for your kind attention to and support for the devastating situation in the Tohoku region, the northern part of Japan's main island. The images of a tsunami-hit Tohoku is unreal and really sad. It is certainly the worst we have ever seen and we pray for the safety of the people and their early recovery to a more normal life. Tokyo is still experiencing a chain of medium-sized aftershocks. It is also facing certain inconveniences, but these are really "nothing" compared to what happened in Tohoku and the strength of the quake Tokyo had on Friday. The situation in Tokyo is exactly the same as last Thursday. As was the case in Kobe earthquake 16 years ago, it may take sometime for the full effects of the event to be felt.

1st Holding To Acquire PE-Backed Security Software Maker

1st Holding, Inc., a newly-listed business software developer, announced that 1st Holding acquired 100% interest in VarioSecure Networks Inc., a PE-backed internet security service firm, from Ant Capital Partners, a Tokyo-based private equity firm. The price is reported as 6.7 billion yen. VarioSecure went private via MBO with Ant Capital in 2009. 1st Holding was also invested in by Advantage Partners, a Tokyo-based mega buyout firm, in 2004 and 1st Holding went public in 2010.

Bain May Buy PE-Backed Restaurant Operator

Bain Capital, a US mega buyout firm, is in the final stage of negotiations with Nomura Principal Finance, the investment unit of Nomura Group, to acquire Skylark Co., Ltd., a major family restaurant chain operator, according to the Nikkei. The proposed deal is estimated at nearly 300 billion yen. Skylark went private via MBO with Nomura Principal in 2006. It has been said that Skylark has had a very difficult time with fierce price competition as well as weak economic growth.

Mizuho Capital Partners Exit Remaining Shares In Vantec

Hitachi Transport System Co., Ltd., a listed logistics unit of Hitachi Group, announced that Hitachi Transport make a tender offer for Vantec Group Holding co., Ltd., a PE-backed international distribution firm,. Mizuho Capital Partners, a 39% equityholder in Vantec, agreed to accept the offer. The TOB price is set at 233,500 yen, a 92.93% premium over a 3-month average. Mizuho Capital Partners, a Tokyo-based private equity firm, invested in 2003 and Vantec went public in 2007.

Sojitz To Tender Offer For Data Center

Sojitz Corp., a 6th-ranked trading companies, announced that Sojitz make a tender offer for Sakura Internet Inc., an internet data center servicer. Sojitz, a 29.3% shareholder in Sakura Internet, plans to aquire additional shares to make it a consolidated subsidiary. The TOB price is set at 230,000, a 53% premium over a 3-month average. Sojitz and Sakura Internet agree to keep Sakura Internet's shares listed as a publicly traded stock.They also entered into the Business Alliance Agreement in the aim of facilitating swift strategic decision-making and executiona and more fully utilizing the Sojitz Group's network and opertional know-how.

Business Software Maker To Go Private via MBO

Business Trust Co., Ltd., a developer of accounting package software, announced that Business Trust approved the tender offer from Yoshiki Holding Co., an investment vehicle by the founding family. The TOB price is set at 35,000, a 46.6% premium over a 3-month average. Since the demand for IT-related investments has been sluggish across the wide variety of industries, some of IT players have started to implement their own strategies like M&A, MBO etc.

ITOCHU To Acquire UK Tire Retailer From PAI Fund

ITOCHU Co., a 4th-ranked trading company, announced that ITOCHU and ITOCHU Europe PLC have agreed to acqurie all the shares of the Kwik-Fit Group, an independent tire retailer in the UK and Europe, from PAI Partners, a European private equity firm, for £637 million. Since ITOCHU operates STAPLETON LTD, a UK-based leading wholesaler,
the Japanese trading house plans to enhance its tire business through this acquisition.

US Real Estate Fund To Buy Japanese Property Mgr

Aetos Japan, a Japan-focused US property fund, plans to acquire the remaining 50% interest in Simplex Investment Advisory Inc., a real estate fund manager, from Goldman Sachs, according to Nikkei. In 2007, Aetos and Goldman together bought the then-listed Simplex, whose portfolio consists mainly of Tokyo office buildings. Aetos by making it a wholly owned subsidiary will provide fresh capital and lift its value over the long run.

Carlyle To Buy PE-Backed Bearing Parts Maker

The Carlyle Group, a global buyout firm, plans to acquire Tsubaki Nakashima Co., a major manufacturer of precision balls bearings, for about 70 billion yen from Nomura Group, according to Nikkei. The bearing parts maker went private with Nomura Principal Finance, one of Nomura's investment units, in 2007. Carlyle will help this technology-oriented maker expand its business abroad.

Marunouchi Capital Set To Buy Seijo Ishii Supermarkets

Marunouchi Capital, a Mitsubishi Corp affiliated investment fund, has begun final negotiations to acquire high-end supermarket operator Seijo Ishii Co., for more than 40 billion yen, according to Nikkei. Marunouchi Capital submitted the highest bid among the short-listed bidders. Seijo Ishii has been well known for its wide lineup of imported foods and its network of about 80 retail outlets in Tokyo, Osaka, Nagoya and other urban locations. The supermarket chain is a wholly owned subsidiary of Rex Holding Co., a PE (Advantage Partners)-backed food chain operator.

ACA To Exit Investment In CSK

Sumisho Computer System Corporation (SCSC), an IT unit of Sumitomo Corp. Group, announced that SCSC and Sumitomo Corp, one of its major trading companies, will make a tender offer for CSK, a PE-backed information service company. ACA Investment, one of Sumitomo's investment units, is a 36.48% equity holder in CSK and approved the offer. ACA invested in September 2009. The TOB price is set at 203 yen, a 45% discount over its 3-month average. If the deal is successful, SCSC will merge with CSK.

Secom To Make Secom Techno Delist

Secom Co. Ltd., a pioneer and the largest firm in the security services industry, announced that Secom has made a tender offer for Secom Techno Service Co., Ltd., a technical service provider of installation and maintenance of security equipment, to make it a fully owned company. Secom, a 67% equity holder, plans to buy all outstanding shares of Secom Techno. The TOB price is set at 3500 yen, a 32.6% premium over its 3-month average. Secom, by integrating the security installer, hopes that consolidated group management will lead to faster decision making and better use of human resources.

Toshiba Tec To Tender Offer For Subsidiary of Yokogawa Elec.

Toshiba Tec. Co., Ltd, a listed manufacturer of information terminals for the retail sector announced that Toshiba Tec made a tender offer for Kokusai Chart Co., a manufacturer of recording chart paper. Kokusai Chart is a consolidated subsidiary of Yokogawa Electric Co., a top-ranked manufacturer of industrial instruments. Toshiba Tec reached an agreement with Yokogawa Elec. to acquire the 54% share in Kokusai Chart. This is a divestment deal for Yokokawa Elec., which will now focus on its core business. The TOB price is set at 330 yen, a 2.7% discount over its 3-month average.

Carlyle To Exit Remaining Shares in Kito

Kito Corp., a Yamanashi-based crane maker, announced a secondary public offering of its shares owned by The Carlyle Group (19.08%), a global mega buyout firm. Kito went private with Carlyle in 2003. Since Kito went public in 2007, Carlyle has gradually decreased its shares and will have exited its investment in Kito completely through this transaction.

Fuji F&M To Go Private Via TOB

Fuji Fire and Marine Insurance Co., a medium-sized non-life insurance firm, announced that Fuji F&M approved a tender offer from Chartis Japan Capital Company LLC, which was set up by Chartis Inc, an non-life insurance unit of AIG Group. The TOB price is set at 146 yen, a 29% premium over a 3-month average. The AIG group originally held 54.66% shares of Fuji F&M.

Daiwabo To Make O-M Ltd. 100% Unit via TOB

Daiwabo Holding Co., Ltd., a textile-based conglomerate, announced that Daiwabo has made a take-over bid for O-M Ltd., a listed manufacturer of automatic machines, machine tools, and other machinery. The TOB price is set at 540 yen, a 76% premium over its 3-month average. The deal size is valued at a maximum of 12.3 billion yen. Daiwabo, originally a 27% equityholder of O-M, will make O-M a fully owned subsidiary through this deal.

AP, CITIC Capital To Exit Shares In Pokka

Sapporo Holdings Limited, one of Japan's major brewers, announced that Sapporo has acquired shares of Pokka Co., a PE-backed beverage manufacturer, to make Pokka a consolidated subsidiary of Sapporo. Sapporo will increase its holdings in Pokka from 21.4% to 85.5%, purchasing from Advantage Partners, a Tokyo-based mega buyout firm, CITIC Capital, a PE unit of CITIC Group, and Meiji Seika Kaisya. Ltd., a leading confectionary manufacturer. Sapporo plans to beef up its soft drink business through this acquisition. Pokka went to private via MBO with AP and CITIC Capital in 2005.

Japan PE Mission Led by the Government

The below is an excerpt from BRIGHTRUST JAPAN BUYOUT MONTHLY (Jan 2011 issue)

INVEST JAPAN MISSION LED BY THE GOVERNMENT

A group of 25 Japanese private equity funds joined a "Invest Japan" mission organized by MInistry of Economy, Trade and Industry (METI) and Japan External Trade Organization (JETRO http://www.jetro.go.jp/en/invest/). The mission visited Hong Kong in January 17-18 attending Asia Financial Forum (AFF).

METI and JETRO formed the mission of Japanese VC and BO GPs to increase overseas investors awareness and interest in Japan's private equity. A luncheon was hosted by Japan Consulate in Hong Kong and METI on 17th inviting local PE professionals and a Japan Private Equity session was held at AFF on 18th. It appeared many attendants at both events had a presumption that Japan is not keen to attract foreign capital. On the contrary, the senior officials from METI and JETRO conveyed a clear message that Japan strongly welcomes overseas investments and that the recent corporate tax cut is a very meaningful step forward. They also took time to explain the benefit of tax reform in April 2009 - now foreign investors by and large can be exempted from assuming a permanent establishment status in Japan (hence no tax filing obligation), even if they directly invest in a local limited partnership. The April 2009 tax change prompted many "undiscovered" Japanese funds to seek overseas investors.

Brightrust participated in the mission and gave a presentation at the luncheon alongside with the Government officials.

Please drop us mail@brightrust.jp a short message if you would like to receive our presentation "Japan Private Equity Market Overview", which contains updated market data.

Please also let us know if you would like more detailed information on April 2009 tax reform. We can send you an official English text.

Tanaka Galvanizing To Go Private Via MBO

Tanaka Galvanizing Co., Ltd., the largest specialist processor of hot galvanizing steel structures and steel products, announced that Tanaka approved a tender offer from Tanaka Holding Co., Ltd. an investment vehicle set up by Tanaka's founding family. The TOB price is set up at 200 yen, a 48% premium over a 3-month average. The deal size is about 1.3 billion yen. SMBC is ready to provide up to 2 billion in financing. Tanaka went public on the Jasdaq exchange in 1997.

Art To Delist Via MBO

Art Corporation, a top-ranked specialist in the moving industry, announced that it has approved a tender offer from CT Total Transport Co., an investment vehicle set up by Art's founding family. The TOB price is set at 1800 yen, a 42% premium over its 3-month average. The deal size (excluding those held by the family) is about 8.7 billion yen. Art incurred a debt of 16.7 billion yen as of September 2010. Sumitomo Trust is ready to provide up to 28.6 billion yen in financing. Art will be delisted from the first section of the Tokyo Stock Exchange upon the successful conclusion of the deal.

Marunouchi Capital To Invest in Die Manufacturer

Marunouchi Capital Co., Ltd., a buyout firm sponsored by Mitsubishi Corp and MUFG, will make an investment in Yamamoto Seisakusyo, Inc., a Saitama-based die manufacturer, according to Nikkei. Marunouchi Capital supports Yamamoto in expanding sales abroad, especially in China, lifting annual sales from 12 billion yen to 20 billion yen. Yamamoto is a technolgy-oriented company holding 340 employees and 2 plants in Japan and the US.

CCC To Go Private Via MBO

Culture Convenience Club Co., Ltd., an operator of FC store chains, announced that CCC received a tender offer by MM holdings, an investment firm set up by Mineaki Masuda, CCC's CEO. The TOB price is set at 600 yen, a 35% premium over a 3-month average. The appointed pricing consultant indicated the share price would be between 666-994 yen on a DCF basis; the initially-proposed TOB price at 575 was raised to 600 yen in CCC. The maximum deal size is about 70 billion yen. Mizuho Corporate Bank and Mitsui Sumitomo Bank are ready to provide up to 100 billion yen in financing. CCC has been famous as a FC operator of Tsutaya, the nationwide CD&DVD rental shop. Since the FC operator plans to change the business model drastically, it would not be appropriate for it to remain on the stock exchange, according to the CCC's press release.

Unison Takes Wine Importer Enoteca Private

Unison Capital has announced that it will sponsor the MBO of Enoteca Co. (3049) alongside with H.C.B.C. Enterprises Ltd., an investment firm headed by the wine importer's board member George Joseph Ho. JPY 6.2 billion will be spent to buy Enoteca stock via a tender offer. It is offering 120,000 yen per share -- a 46% premium over Wednesday's closing price.

According to the press release, the discussion between Enoteca management and Unison started as late as October last year. The recent surge of high-end wine prices has put pressure on the company's profitability, while Chinese consumer's strong demand for french wines opted the wine importer to expand into nearby Asian markets with the support of Unison.

INCJ To Invest In Spin-Off From JEOL

JEOL Ltd., the largest manufacturer of electron microscopes, announced that JEOL has divested the nuclear magnetic resonance business unit and set up a new firm, in which INCJ, a private-public investment fund, decided to make an investment. The new firm, called JEOL RESONANCE, will issue new shares to INCJ and Jastec Inc., an affiliate of Kobe Steel Group as well as a major supplier of resources for NMR machines. INCJ is to be the largest stakeholder (50.1%).

Works Application To Go Private Via MBO

Works Application Co., Ltd. a well-run package software developer and maintenance provider, announced that Works Appli. supported the takeover bid by WPK Holding Inc., an investment firm set up by the current managements and a JV between Polaris Capital and K&C. Polaris is a middle market buyout firm and K&C is a Tokyo-based buyout firm, whose CEO used to be an outside director of Works. The TOB price is set at 55,000 yen, a 43% premium over a 6-month average. The total proceeds for acquiring all outstanding shares will equate to JPY 25.5 billion. Bank of Tokyo-Mitsubishi UFJ will lend up to JPY 17.1 billion. Works Application reported a revenue of JPY 21 billion with an operating profit of JPY 1,444 million for the FY ending June 2010 and a revenue of JPY 11 billion and an operating profit of JPY 914 million for the 6 month period ending December 2010.

Industrial Production Index Rises 3.1% In Dec

The Ministry of Economy, Trade and Industry announced that the industrial production index rose a seasonally adjusted 3.1% from the previous month to 94.6 (2005=100) in December. The increase was larger than the expected 2.9% expansion. For the 12-month period through December, the index rose 15.9% from a year earlier, marking the first rise in three years.

S&P's downgrades Japan to AA-

Yesterday Standard & Poor's lowered the long-term sovereign-debt rating of Japan by one notch to AA- from AA, the first downgrade for Japan since April 2002. The surprise downgrade has put Japan on a par with China, Taiwan, Saudi Arabia and Kuwait. S&P foresees Japan's fiscal deficit remaining at high levels for several years while it expressed a skeptical view on the ability of the current government by saying "In our opinion, the Democratic Party of Japan-led government lacks a coherent strategy to address the negative aspects of the country's debt dynamics." Moody's Investor Services said it was maintaining its own AA2 rating, but echoed worries over political gridlock.

The JGB market showed little change yesterday and today. 95% of outstanding JGBs are held by domestic institutional and retail investors, who are wary of long-term prospects but convinced that near-term credit risk is minimal, surely not more than that of AA-rated Spain.

Biotech Firm Hayashibara To Go For ADR Turnaround Process

Hayashibara Co., a Okayama-based biotechnology company, announced it will enter an alternative dispute resolution (ADR) process with more than 30 creditors regarding debt totaling as much as 140 billion yen. The firm, known for its sweeteners and anti-cancer researches, announced later that it was proud of its 28 billon yen in sales in 2010.

Advantage Partners In Talks Over Tokyo Star Bank

Advantage Partners LLP, a Tokyo-based large cap private equity firm, is reportedly in talks with a consortium of more than 10 Japanese and non-Japanese creditors with regard to the restructuring of its problematic investment in Tokyo Star Bank Ltd. The Yomiuri, Japan's largest newspaper, reported that the consortium has proposed to set up a new fund between the creditors and AP and the plan may be agreed on as early as this month. Under the restructuring plan, the bank consortium will take the helm, while AP may still retain minority voting rights. The share transfer price is expected to be (close to) zero. The consortium includes Lone Star, previous owner of Tokyo Star Bank, Shinsei Bank, Aozora Bank, Credit Agricole SA and the Development Bank of Japan.

In 2008, AP paid JPY 250 billion (USD 3 billion) to acquire Tokyo Star Bank through TOB. One-third of the total proceeds was funded by AP funds and the remaining two-thirds was funded by the banks. AP has used share dividends from Tokyo Star Bank to service interest payment. Recent losses booked by the Bank - though very modest at JPY 2.7 billion (USD 30 million) in FY ending March 2010 and JPY 3.1 billion (USD 37 million) for the succeeding 6 months period - has made it difficult for the bank to continue to pay dividends.

Ant Capital Exits Investment In Maruboshi

CMC Co., a listed manual-service provider, announced that it has acquired 100% of shares in Maruboshi Co., a PE-backed service provider of high-quality technical documents. CMC paid 1.68 billion yen. Maruboshi was acquired by Ant Capital Partners Co., Ltd., a Tokyo-based private equity firm, in 2008.

NEC, Lenobo In Talks On PC Joint Venture

NEC Corp., is in the final stages of negotiations with Chinese firm Lenovo Group Ltd. to join forces in the personal computer business through a joint venture, according to the Nikkei.

Condominium Market Starts To Recover

The Real Estate Economic Institute released a report of a 22.4% increase in the number of new condominiums put on the market in the Tokyo metropolitan area on the year to 44,535 units in 2010. It is the first increase in six years. The figure is projected to rise 12.3% to 50,000 units this year. After years of being stuck in the doldrums, Japan's condominium market is beginning to show signs of recovery, prompting property companies to resume aggressive condo. development in the metropolitan area.

Goldman Sachs To Boost Research Coverage of Japan

Goldman Sachs Japan Co., has been beefing up its research operations for Japanese equities, according to Nikkei. Goldman began hiring analysts late last year, taking on talent specializing in the insurance and transport industries in December. It started following individual Japanese internet and media companies this month, and is due to add an analyst for the machinery industry shortly. As a result, Goldman Sachs Japan's research team is expected to soon cover nearly 300 Japanese companies. These moves are interpreted as a sign that foreign investors' interest in Japanese stocks are recovering.

3 Foreign and 2 Domestic Companies On Short List For Bankrupted Takefuji

US fund Cerberus, US Buyout Shop TPG Capital, nonbank financial firm J Trust Co., PE-Backed Tokyo Star Bank and major South Korean consumer credit company A&P Financial are on the short list for Takefuji Corp's rehabilitation sponsor, according to Nikkei. They are expected to offer an acquisition price at the end of next month, with the sponsor likely decided on by March.

Valiant Partners Exits Shares In Pharmacy

Valiant Partners Co., a mid-sized private equity firm, announced that it has exited its investment in Hanshin Dispensing Pharmacy Co., a Kobe-based pharmacy firm. Valiant sold the shares to pharmaceutical wholesalers and the founders' own company. Hanshin went private in a MBO with Valiant in 2007.

Image Holdings To Go Private In MBO With Fund

Image Holdings Co., a listed mail order company announced that Image will go private with Mizuho Capital Partners, a Tokyo-based private equity firm. An investment entity set up for the buyout will launch a tender offer at 314 yen per share, a 26 (22)% premium over its 3 (6)-month average.

Goldman to Exit Accordia Golf

Accordia Golf Co. (2131) announced that Goldman Sachs will sell all its shares of the golf course operator. Through its group company, Goldman has been Accordia's largest shareholder with a stake of 44.7% - worth JPY 37 billion or USD 447 million at yesterday's market closing price. Accordia also announced the termination of its operational partnership agreement with Goldman. After purchasing a string of Japanese golf courses following the bubble burst in the 90s, Goldman took the golf course operator public in 2006. At the time of the IPO, Accordia was managing 10 golf courses for Goldman. Since then Accordia has acquired the bulk of the courses and currently manages just one on behalf of Goldman.

At today's opening, Accordia's stock price plunged as much as 13%. The sale price will be determined based on the closing price on a date between January 17th to 19th. Accordia will buy back its shares up to JPY 2 billon (USD 24 million).

PE-Backed REINS Sells Red Lobster Japan To Restaurant Operator

REINS International Inc., the Advantage Partners-backed food chain operator, announced it has sold all shares of Red Lobster Japan Co. Ltd., to CELUX Inc., a Tokyo-based operator of various kinds of restaurants. Financial terms are not disclosed. REINS purchased Red Lobster Japan in 2002 from retail giant Aeon Co.