Carlyle Divests Qualicaps And Chimney

Carlyle has announced that it has agreed to sell its entire shareholdings in Qualicaps (Nara, Japan) to Mitsubishi Chemical Holdings (4188). Qualicaps is the largest provider of pharmaceutical capsules in Japan and is the second largest in the global high quality capsule markets, which has an estimated size of USD 1.2 billion with single-digit growth in recent years.

According to Mitsubishi Chemical, Qualicaps was valued at JPY 55.8 billion (USD 656 million) (inclusive of debts). The revenue of Qualicaps is estimated at JPY 19 billion (USD 230million) in 2012. Qualicapse CEO said, "During Carlyle’s ownership, our revenue and EBITDA increased by more than 50% and 120% respectively.." The transaction is expected to close in March 2013.
Carlyle acquired Qualicaps from Shionogi (4507) in October 2005 reportedly for JPY 20-25 billion (USD 235-300 million).

10 days ago,  Carlyle also announced that its majority-owned restaurant operator, Chimney, relisted by making a public stock offering on the Tokyo Stock Exchange Second Section on December 14, 2012 and that Carlyle would sell shareholdings in the company equivalent to around 53% of total shares issued.

In December 2009, Carlyle sponsored Chimney's MBO and acquired a 87.56% of the company for JPY 19.4 billion (USD 228 Million) of which JPY 8.6 billion was financed by debts.

INCJ And Japan Consortium To Acquire 75% Of Renesas

On December 10th, the Innovation Network Corp. of Japan announced that INCJ and the consortium of 8 leading japanese companies will acquire 75% of Renesas Electronics Corp  (6723) for JPY 150 billion (USD 1.79 billion). INCJ will acquire 69.2% of all outstanding shares, while the consortium of Toyota Motor Corp. (7203), Nissan Motor Co. (7201), Denso Corp. (6902), Keihin Corp.(7251), Panasonic Corp. (6752), Canon Inc. (7751), Nikon Corp. (7731) and Yasukawa Electric Corp.(6506) will own 5.8% in total.

INCJ In Talks With Sony For The Purchase Of Battery Operations

According to a Nikkei report, Sony Corp. (6758) has begun negotiations to sell its battery operations to the Innovation Network Corp. of Japan and  the government-backed fund has already proposed a price. Plans under consideration include Sony going ahead with a full sale as well as retaining a partial stake.
Taiwanese firm Hon Hai Precision Industry Co. has reportedly shown interest as well.

Advantage Partners To Buy Sanyo's Camera Business

Sanyo Electric Co. a subsidiary of Panasonic Corp. (6752), will sell its digital camera business to Advantage Partners. Sanyo spun off its digital camera and movie camera business section to Sanyo DI Solutions Co. in July this year to streamline operations. Sanyo and the special purpose company to be funded and managed by Advantage Partners entered into an agreement on the transfer of all the shares of Sanyo DI Solutions as of March 31, 2013. Financial terms are not disclosed.

An earlier report by The Nikkei said "The deal to sell all shares in Sanyo DI Solutions Co., along with its Indonesian factory, for an estimated several hundred million yen would close a chapter in the streamlining effort." "Sanyo's digital camera business manufactures products for Olympus Corp. (7733) and other brands on an OEM basis. Squeezed by the spread of smartphones sporting high-quality cameras, the market for digital compact models has shrunk. Sanyo's annual production has slumped to roughly 5 million units from a peak of 17 million, accounting for around 30% of global output at the time, with sales down from 220 billion yen in fiscal 2003 to tens of billions of yen. The business has apparently been mired in red ink."

Sony To Sell Battery Business

Sony Corp. (6758) is reportedly in talks with Taiwan's Hon Hai Precision Industry Co., as well as Japanese and foreign investment funds, for a potential sale of its battery business. The sale could be partial. Sony's battery business generated roughly JPY 142.5 billion (USD1.7 billion) in sales in the year ended March 2012.

According to a Tokyo research firm, Sony controlled 6.9% of the global market for lithium ion batteries in the April-June quarter this year, placing the company at fourth in the world after Samsung SDI Co., Panasonic Corp. (6752) and LG Chem Ltd.

Brightrust And 3 Other Parties Won Study Mandate From Japan's Largest Pension Fund

Japan's largest public pension fund, the Government Pension Investment Fund (GPIF) awarded "feasibility study"  mandates to  4 institutions including Brightrust PE Japan.  In August, GPIF solicited bids to conduct feasibility study on the USD 1.3 trillion fund's possible future investments in private equity, infrastructure and real estate. After a detailed selection process, the study mandates were awarded to 4 bidders.

Brightrust PE Japan submitted a proposal that aims to address various research topics that GPIF seeks to find solutions or deeper understanding before the pension fund formally contemplates private equity style investment programs. Capital Dynamics, T&D Asset Management and law firm Atsumi & Sakai were also given mandates for their respective areas of expertise.


Reuters – Japan’s GPIF to Conduct Studies for Alternative Asset Investment
Posted on: November 26, 2012

Japan’s Government Pension Investment Fund has selected four companies to conduct feasibility studies for its possible future investments in alternative assets, including private equity, writes Reuters. GPIF holds 108.2 trillion yen ($1.31 trillion) in assets.

Reuters – Japan’s Government Pension Investment Fund, the world’s biggest public pension fund, said it has selected four companies to conduct feasibility studies for its possible future investments in alternative assets, including private equity.

GPIF, which holds 108.2 trillion yen ($1.31 trillion) in assets, almost about the size of the Australian economy, is keen to diversify its massive portfolio to generate higher long-term investment returns.
The fund has been paying out more in benefits to pensioners than it receives in contributions to the national pension system since the 2009/10 financial year as the Japanese population is ageing rapidly.
GPIF has selected Japanese law firm Atsumi & Sakai, Swiss private equity fund firm Capital Dynamics, Japanese life insurer-backed asset firm T&D Asset Management and Tokyo-based independent private equity consultant firm Brightrust PE Japan for the feasibility studies.
They are required to complete their studies by end-March, 2013.
The results of the studies will be presented to the public and to the members of fund’s investment committee for review in the future, a GPIF official said.
GPIF Chairman Takahiro Mitani told Reuters in October that the public fund is considering whether to diversify into infrastructure, private equity and property, although not into hedge funds.
The fund has already diversified its assets by starting to invest in emerging markets equities earlier this year.
The fund makes allocations in line with its model portfolio, which currently gives a weighting of 11 percent to domestic stocks, 67 percent to domestic bonds, 9 percent to foreign stocks, 8 percent to foreign bonds and 5 percent to short-term assets.
The portion of emerging markets equities was allocated from GPIF’s foreign equities portfolio. ($1 = 82.3700 Japanese yen) (Reporting by Chikafumi Hodo; Editing by Muralikumar Anantharaman)  

CITIC Japan Will Sponsor Polymatech Rehabilitation

CTIC Capital Japan will acquire 100% of Polymatech Co., a manufacturer of polymer parts for electronics industry, as sponsor under the civil rehabilitation process. With the investment from its 2nd fund, CITIC Capital Japan will send a few directors to Polymatech and leverage CITIC Group's network to assist the company to restore growth. Polymatech has production facilities in Japan (Fukushima), China, Malaysia and Indonesia and has a strong market position in mobile, car and home segment applications.

For details, please see:
http://www.citiccapital.com/admin/data/PageContentPage/ContentPage/20121108161526/BOD%20of%20Polymatech%20Nov%209%202012.pdf

Japan To Invest USD 15 Billion In Indian Infrastructure Projcts

Japan aims to carry out 19 infrastructure projects totaling roughly JPY 1.2 trillion (USD 15 billion) in western India through a coordinated government and private-sector effort to help India to obtain stable supplies of industrial water and power and improve its transportation and logistics networks. The projects will form the core of the Delhi-Mumbai Industrial Corridor.

Prime Ministers of both countries are expected to reach an agreement on the plans in a summit meeting scheduled for Friday.

The massive investment program will consist of JPY 240 billion (USD 3 billion) for water-related facilities, JPY 200 billion (USD 2.5 billion) for next-generation grids and power plants and JPY 760 billion (USD 9.5 billion) for transportation and distribution projects.

Sanyo May Sell Its Digital Camera Business To A Fund

Sanyo Electric Co., a subsidiary of Panasonic Corp. (6752), is reportedly in talks to sell its digital camera business to an investment fund and the sale may be completed by the end of this year. 

Sanyo has no camera brand of its own, instead it supplies products on an OEM basis to several firms including Olympus Corp. (7733).  Its digital camera production reached about 11 million units in the year ended March 2011. 

While Panasonic has its own digital camera operations, the businesses have been kept separate and Sanyo spun off its operations in this July with an eye toward their eventual sale. 

Carlyle Japan Closed 2 Deals In 40 Days

Carlyle Japan announced that Carlyle Japan Partners II fund will acquire a 100% stake in Diversey G.K. (“Diversey Japan”) from Sealed Air Corporation (NYSE:SEE) for approx. JPY 30 billion (USD 377 million). Carlyle will sponsor the management buyout of Diversey Japan, which is expected to be completed in the 4th quarter of this year. Diversey Japan is a leading provider of cleaning, sanitation and hygiene products and solutions, mainly to institutional clients, with trailing twelve month sales as of September 30, 2012, of USD 321 million. Diversey Japan marks the 2nd deal for CJP II fund just in 40 days.

On September 25, Carlyle Japan announced that it had acquired the entire shares of Arizona-based engine component maker Walbro Engine Management from Sun Capital Partners. Financial terms were not disclosed. Walbro is the world’s largest manufacturer of carburetors in the lawn & garden market and a major manufacturer of ignition systems, fuel injection and air/fuel management components. It employs 2,200 people in the United States, Japan, Thailand, China and Mexico.

Sun Capital invested in Walbro in 2007 from its fourth fund. So far this year, Sun Capital has 7 realizations and Walbro is the 4th sale to a private equity firm. 

NTT DoCoMo To Set Up JPY10bn Venture Fund

NTT DoCoMo (9437) will establish a JPY 10 billion (USD 126 million) corporate VC fund, Docomo Innovation Fund, for investing in a wide range of fields, including the internet, healthcare, finance and media, by March next year. The firm will also institute a business incubation program. "DoCoMo Innovation Village" will pay development costs and provide office space and other infrastructure to promising projects.

While Docomo already has a VC fund in Silicon Valley,   this is a new effort for Docomo to focus on domestic ventures. Its parent NTT has two corporate venture funds. Its rival KDDI Corp. (9433) set up its own JPY 5 billion venture fund in February to invest in internet-related fields.

Panasonic May Look To Sell Its Cell Phone Business

Panasonic Corp. (6752) will consider selling the Japanese cell phone business or forming a partnership with another company, while it will end European operations as early as fiscal 2012, The Nikkei reported.

Panasonic currently sells mobile handsets in Europe and in Japan. Panasonic, lagged behind rivals in releasing smart phones, has already begun restructuring the business by shutting down its domestic factory in Shizuoka Prefecture and moving production to Malaysia. The cost of restructuring the mobile phone business may total JPY 100 billion (USD 1.25 billion).

The company sold 5 million smartphones and generated some JPY 130 billion in sales from the mobile phone business in fiscal 2011. Earlier it targeted tripling the sales volume to 15 million units in fiscal 2015.

As of July, Panasonic projected a net profit of JPY 50 billion (USD 630 million) for the current FY through March, a turnaround from the previous year's net loss of some JPY 770 billion.

Japan Post Plans To Go Public in 2015

Japan Post Holdings Co. will submit a plan for going public in 2015 to the minister for postal reform today. It hopes to receive approval from the postal privatization committee next Monday.

The Japan Post group has net assets of roughly JPY 11 trillion (USD 137 Billion). Under the plan, the government will sell 2/3 of its holdings in stages beginning in the autumn of 2015 and hopes to raise up to JPY 7 trillion.

The matter of selling shares in Japan Post Bank and Japan Post Insurance Co. -- the group's biggest profit earners -- has been shelved for now, while its money-losing postal services business needs to be turned around.

It is expected that the approval of the plan will pave the way for the Japan Post to expand into new businesses, such as mortgages. Commercial banks have been adamantly objecting the Japan Post to enter into their business territory as they see the condition for fair competition is hard to be ensured with JP's massive size and the government backing.

Nomura Plans to Set Up an India Infrastructure Fund

Nomura Holdings Inc. (8604) plans to launch an infrastructure fund focused on India as early as next year. According to The Nikkei, Nomura aims to raise USD 500 million for the fund from Japanese and Indian investors. The fund will invest in companies operating power grids, highways, airports and other infrastructure. The Indian government's latest five-year plan calls for USD 1 trillion in infrastructure development, with about half of this amount to come from the private sector.

Mizuho Financial Group Inc. (8411) unit Mizuho Corporate Bank and Mitsui & Co. (8031) started one targeting Asian infrastructure in 2008.

India's infrastructure has been one of the target sectors for Japan's ODA provided by the Japan International Corporation Agency (JICA), while a fund like this would suit the investment criteria of the Japan Bank for International Cooperation (JBIC) if structured as a private equity fund.

Yet Another Public-Private Fund ?

According to The Nikkei yesterday, "The government plans to set up a public-private fund to aid the development of innovative drugs targeting cancer, diabetes and other diseases that are difficult to treat."

 "Legislation will be submitted to the Diet next year to enable the public National Institute of Biomedical Innovation to raise long-term investment funds. The institute will work with such research organizations as Riken to find promising projects pursued by universities or individual researchers."

 "In addition to the government-backed Innovation Network Corp. of Japan (INCJ), financial institutions, pharmaceutical companies and venture capital firms are expected to contribute, with the fundraising target set at JPY 30-40 billion (USD 380-500 million) by fiscal 2014. Research on treatments using induced pluripotent stem cells, or iPS cells, will likely be covered by the fund."

This is yet another initiative taken by the Government to establish "public-private" funds. Politicians and bureaucrats must be seeing a public-private fund as a wonderful means to meet investment requirements of certain sectors in Japan without "explicit" budget allocations.

It would be fair to say that INCJ set the model, where the Government and and private companies contribute a small amount of capital, while most of the investable proceeds are funded by Government-guaranteed loans from banks. ETIC pretty much followed suit and its huge success in the JAL turnaround may have lead the policy makers to create more.

A bill to establish public-private infrastructure funds was submitted to the last Diet but it was not discussed due to the dicker between the leading party and opposition parties concerning the timing of the next election. The bill to establish public-private agricultural funds was passed with strings attached, which may hamper the original idea of encouraging free competition in Japan's agri-sector.

In the cases of infrastructure, agriculture and pharma funds, the Government expects the fund managers to raise substantial amount of private money by themselves. This is very tough, especially where there is an expectation for a degree of Government involvements.    

Japan's Trade Deficit Increases In September Due To Reduced Exports To China

Japan posted a JPY 558.6 billion (USD 7.0 billion) trade deficit in September.

Japanese exports fell 10.3% from the previous year in September to JPY 5.360 trillion (USD 67.7 billion), the fourth straight month of decline, after decreased 5.8% on year in August. 

Exports to China dropped 14.1% on year to JPY 953.8 billion (USD 12.0 billion) in September, sharper than the previous month's 9.9% decline and marking the fourth consecutive month of contraction. Exports of motors, cars and auto components declined significantly, down 48.7%, 44.5% and 17.5%, respectively.

Exports to the U.S. grew 0.9% from a year earlier, the 11th straight month of increase, but the weakest since January's 0.7% rise.

Japanese imports rose 4.1% from a year earlier to JPY5.918 trillion (USD 74.7 billion) after a 5.4% fall the previous month.

According to DJ, some analysts have estimated that decreased exports to China would bolster the chance of Japan's economy contracting for two straight quarters through December, a situation generally viewed as a recession. 

The increased risk of recession, in addition to the failure to meet 1% inflation target, will bring an increased pressure from the government to the BOJ to ease further. The BOJ is holding its policy meeting later this month.

Only 1% of Investors Think Japan Presents The Best Opportunities In Asia - Preqin Survey

Preqin's latest quarterly report has a survey on global investors. It says:

- During 2012 so far, 35% of the LPs interviewed have made new commitments to private equity funds focusing on opportunities in Asia. 

- 34% of LPs expect to increase their allocation to Asia over the next 12 months, with a further 65% of investors looking to maintain their current level of exposure to the region.

- 35% of LPs prefer to invest in country-specific funds. 31% of LPs look to gain exposure through pan-Asia funds, while 16% prefer global funds that also invest in Asia. 23% prefer to take an opportunistic approach.

- Greater China continues to attract the most attention from LPs, with 58% of the investors surveyed stating that the region is presenting the best investment opportunities within Asia, followed by India (36%) and ASEAN (33%). Last year a higher 68% and 61% named China and India respectively. ASEAN countries such as Vietnam and Malaysia are attracting more attention. 

- Only 1% viewed that Japan presents the best investment opportunities in Asia. 

Sorry for us, a Japan-based LP advisor, but it is a fact that Japan today offers great investment opportunities and that investors should create a PE portfolio that does not rely on a single profit driver. 

Carlyle / Unison-owned Covalent Avoids Default By Loan Extensions And Buy-backs

Covalent Materials, backed by Carlyle and Unison, has avoided a default on its JPY 53.3 billion (USD 680 million) outstanding debt due February 2014 after agreeing to buy back up to JPY 21 billion at a 24% discount and paying the rest with up to 4 year maturity extensions. The interest rate was increased from 2.87% pa to 4.25%  pa and the redemption amounts will increase by JPY 1.25 over JPY 100 loan notional every 6 months. The original proposal put together by Covalent was to extend the maturity by 4-6 years on the 60 % of the outstanding loan balance without a rate increase nor buy-backs. Blackstone Advisory Partners advised the bondholder group.

Covalent, ex-Toshiba Ceramics, was bought by Carlyle and Unison in 2006. Carlyle held a 47.2 per cent stake in Covalent and Unison a 47.5 per cent stake at the end of March 2012.

The business has recently struggled to maintain profitability as the price of chips has fallen. Covalent sold its silicon wafer business to a Taiwanese company in March 2012, causing a one-time loss of JPY 31 billion (USD 400 million), in order to focus on ceramics business (materials and parts for manufacturing semiconductors). The wafer business and the ceramics business respectively occupied a half of Covalent's JPY 68 billion (USD 870 million) revenue in 2012.

Sony And Olympus To Form A Surgical Endscope JV

Sony Corp. (6758) will take on a JPY 50 billion (USD 640 million) private placement of Olympus Corp. (7733) for slightly more than 1,400 yen a share and become Olympus' top shareholder, with a roughly 11% stake. The capital ratio of scandal-tainted Olympus fell as low as 2.2% at the end of June. The share issuance to Sony is expected to lift the ratio to around 10%.

Sony and Olympus will establish a joint venture to develop endoscopes making the most of Sony image sensor and 3-D imaging technologies, with a focus on a type used in keyhole surgery. Olympus is the world's top manufacturer of gastroenterological endoscopes with its 70% market share, but the company trails foreign rivals in surgical endoscopes.

Recently, Sony has funded JPY 57 billion through the sale of its chemical business to the DBJ - Union consortium, while Olympus has sold its mobile phone retailer subsidiary to Japan Industrial Partners for JPY 53 billion.

Softbank May Acquire eAccess, Minority-Owned By Goldman, Blackstone and Temasek, Paying As Much As 4 Times Market Value

Softbank Corp. (9984), Japan's third-largest mobile phone carrier, will reportedly acquire fourth-ranked rival eAccess Ltd. (9427) for as much as  JPY 200 billion (USD 2.56 billion). According to a press report, Softbank plans to make eAccess a wholly owned subsidiary through a stock swap and hopes to use eAccess' available bandwidth to cope with sharply rising data traffic. Combined sales at Softbank and eAccess in this FY are expected to total about JPY 3.6 trillion (USD46 billion), which will make Softbank the second-largest mobile carrier in Japan.

At the news, eAccess shares immediately hit the limit price, while Softbank shares plunged by 3%.
The market value of eAccess was merely JPY 52 billion (USD 670 million).

In July 2010 Blackstone lead a JPY 45 billion (USD 577 million) share financing by eMobile, a subsidiary of eAccess to be merged with its parent immediately after the share financing. Blackstone Capital Partners V funds invested JPY 16 billion (USD 200 million) (equivalent to 6% of the subsidiary), Goldman Sachs Group invested JPY 12 billion and eAccess invested JPY 17 billion. Temasek also had a minority stake in eMobile.

Unison Participates In DBJ's Sony Chemical Acquisition

Unison Capital has announced that it has acquired a 40% stake in Dexerials Corporation, formerly a part of Sony Chemical & Information Device Corporation, a 100% subsidiary of Sony Corporation (6758). The investment was made through a SPC, which is 40% owned by Unison and 60% owned by the Development Bank of Japan. Dexerials manufactures and sells adhesive materials, optical film and other materials. Unison and the DBJ aim to increase the revenue of Dexerials from JPY 57 billion (USD 735 million) in 2012 to JPY 100 billion in 5 years. Dexerials is capitalized with JPY 5.48 billion (USD 70 million) and plans to IPO in the future.

In late March it was agreed that the DBJ would acquire the chemical business of the Sony subsidiary. The sale contract was concluded on June 28 and Sony announced that it has received JPY 57.3 billion (USD 735 million) from the DBJ on September 28. 

It is unknown when and how the Unison's involvement started. According to a source, Unison was among the final contenders in the Sony Chemical auction early this year. 

Brightrust Buyout Monthly For July-Sept 2012

The July-September issue covers;

• Unison's $1 billion Sushiro exit,  foreign funds sweep large deals 
• Unison invests in Korean battery company
• Polaris invests in a unique housing company
• Fortress acquires a troubled debt-collection company and its parent consumer finance company 
• JIS invests $190 million in a semiconductor fabrication maker under reconstruction
• ACA and Sompo Japan invest in an elderly care home operator
• JIP buys a mobile phone seller from Olympus Corporation for $680 million 
• Permira buys Japan's top-selling belt-conveyer Sushi restaurant from Unison
• Next buys a 40-year-old cooking school operator for turnaround
• Jupiter Shop Channel, 50% owned by Bain, expands into Thailand
• Aozora managed to push back Gov't takeover deadline, but Cerberus will sell its 50 % stake
• Carlyle postponed the listing of Tsubaki Nakashima
• INCJ invests in a high-tech battery JV with 3 Japanese companies
• iSigma sells a fruit juice maker to a strategic buyer
• Advantage will hand over its restaurant chain investment to a strategic buyer
• J-Star sells a silver-focused mail order company at a high multiple
• Nippon Mirai divests a restaurant information service provider
• DRC exits from its 5.5 year old PIPE deal 
• State-backed ETIC makes $4 billion profit from Japan Airlines turnaround
• KKR may lose $1.3 billion chip maker deal to a Japan consortium led by INCJ
• Tokyo Metropolitan Government appoints 2 infrastructure managers
• Japan's largest public pension will study implementation schemes for its PE investments,  etc.

If you are interested, please send email to monthly@brightrust.jp with your name and contact details.

Cerberus To Sell Its 50% Stake In Aozora Bank

Aozora Bank has told media that its majority shareholder Cerberus Capital Management LP will sell some of its holdings in the bank in the planned buyback that was announced by Aozora a month ago and it may also begin selling the remainder in 2012 through the capital market or off-exchange direct transactions.

On August 27, Aozora Bank agreed with the Japanese government to repay public funds in installments over the next decade to push back the mandatory conversion of the preferred shares owned by the Government until 2022. When the government injected public funds into the bank in 1999 and 2000, the state received convertible preferred shares worth JPY 320 billion (USD 4.1 billion), of which JPY 180 billion worth remain outstanding. Aozora announced that it would reduce its capital base from JPY 420 billion (USD 5.4 billion) to JPY 100 billion, buy back about 20% of shares issued and boost its dividend payout from 30% to 40% of earnings.

KKR May Lose Renesas to a Japan Consortium Led by INCJ

Major Japanese manufacturers have teamed up with a government-backed Innovation Network Corporation of Japan (INCJ) to put together a rescue package for Renesas Electronics Corp. (6723). According to The Nikkei, the consortium led by INCJ will include Toyota, Nissan, Honda, Panasonic, Cannon, Fanuc, Denso, Keihin and possibly Bosch. It plans to invest more than JPY 100 billion (USD 1.28 billion) to acquire a majority stake in Renesas by the end of the year.

Renesas is one of the world's top producers of microcontrollers used in automobiles, consumer electronics and  industrial machinery. Some of its cutting-edge custom-made products are hard to replace with those from other manufacturers. The concern over ensuring the supply of these microchips apparently alerted the manufactures and INCJ and prompt them to submit a rescue proposal.

In late August, KKR proposed investing about JPY 100 billion in Renesas. Major lenders and major shareholders - NEC, Hitachi and Mitsubishi Electric - were ready to accept at one point. But the manufactures were wary that microcontroller supplies could be disrupted as they learned that KKR is likely to direct Renesas to focus on mass-production of generic chips. As conditions for its investment, the U.S. firm is said to have sought the removal of Renesas' entire board as well as additional loans from the lenders and three shareholders, who have already provided JPY 100 billion to Renesas to enable large-scale restructuring, entailing roughly 5,500 job cuts as well as the sale and closure of 19 domestic plants.

(Pls also see our post on August 29th.)

iSigma's Sale of Gold-Pak to Air Water To be Completed This Month

iSigma Capital's sale of its 100% stake in Gold-Pak, a fruit juice maker, to Air Water Inc. will be completed at the end of this month. The news was released in mid-August. Air Water is an industrial gas production company with USD 2 billion market cap. However, 2/3 of Air Waters sales are from non-Gas business. iSigma acquired a 92.6% stake of Gold-Pak through a tender offer in January 2011. The fund spent JPY 4.5 billion (USD 57million), of which JPY 1.5 billion was borrowed from Aozora Bank. We estimate the entry EBITDA multiple was around 3.5x (after paying a 56% premium).
Little financials are available regarding the exit of this time. According to Air Water's press release, Gold-Pak's sales, which had been falling in the preceding years, were stable at around USD 500 million in 2011 and 2012. Today Air water shares are trading at PER 10. As the entry price was low, even a sale at PER 7 (a random assumption) would have brought 1.5-2.0 x return to the iSigma fund.

The Enterprise Turnaround Initiative Corp of Japan Pocketed USD 3.8 Billion Profit From Japan Aiirlines' Re-Listing

Further to our post on August 3rd, Japan Airlines Co. is now re-listed at Tokyo Stock Exchange. This morning the carrier's market capitalization reached JPY 690 billion (USD 8.8 billion) making it the second largest IPO in this year only after Facebook. The Enterprise Turnaround Initiative Corp. of Japan supplied a total of JPY 350 billion (USD 4.5 billion) in support of the collapsed airline in 2009.  Today ETIC is cashing in JPY300 billion (USD 3.8 billion) profit for the benefit of tax payers.  There are some big deals in Japan. 

DRC Exits From Yumeshin Holdings At 1.5x

DRC Capital has sold its investment in Yumeshin Holdings, a staffing company specializing in construction workers. DRC invested JPY 920 million (USD 12 million) to acquire a 7.6% stake in the company in February 2007. Since the minority acquisition, DRC guided the company to focus on the core competence and helped restructure the swollen balance sheet. The GP believes the operational improvements have helped Yumeshin shares to out-perform peers and general equity market. This 5.5 year PIPE investment achieved 1.5x ROI with a gross IRR of 8.3% p.a..  During the corresponding period,  Nikkei Index fell by 49% (-11.3% p.a.) due to the Lehman Crisis and 3.11 Tohoku earthquake.

J-Star Exits From Elderly-focused Mail Order Business At A High ROI

On September 7th, J-Star announced that it has transferred all of the shares of Iki Iki K.K., a mail order business focusing on growing elderly population in Japan,  to NK Relations Co., Ltd., a wholly-owned subsidiary of Noritsu Koki Co., Ltd. Noritsu Koki has its origin as a manufacturer of film processing machines, but has been expanding business lines to include medical care, food and environments.

J-Star fund and its co-investors acquired Iki Iki in 2009 for about USD 13 million. As this was a turnaround investment under the Civili Rehabilitation Act, the entry multiple was extremely low and no leverage was used. According to a source quoted by PEI Asia, the sale price to Noritsu was approx. USD 100 million. J-Star CEO was quoted as saying "(During the holding period) EBITDA grew from $5.8 million to $12.5 million and net cash increased more than seven times to $18.3 million".

This is another example where operational improvement brought a significant ROI. "Silver Business" is the way to go.

Sushiro Will Bring $700 MM Profit To Unison II Fund

As is reported by several industry media, Unison Capital has announced that it will sell its entire stake (81%) in Sushiro, the top-selling revolving sushi restaurant chain in Japan, to an Irish investment company backed by Permira. Permira revealed that it was "valuing Sushiro at an enterprise value of approximately USD 1 billion".

Sushiro deal should be a home-run for Unison's second fund, which raised JPY 75 billion (USD 960 million) in 2004.

Unison acquired a 20% stake in the Sushi restaurant operator in 2007, increased its holdings to 90% by TOB in 2008 and took the company private in 2009. Unison paid approximately USD 285 million to acquire a 100% stake in Sushiro, of which US 170 million was financed by bank loans. After allocating 19% to the founder, we believe Unison spent approx. USD 100 million to finance the 81% stake (and associated cost). With USD 1 billion EV and no net outstanding debt, the deal will score approx. 8x ROI bringing USD 700 million profit to Unison II fund. Unison purchased Sushiro at 4x EBITDA, grew its EBITDA by as much as 3 times, and sold it at a very modest multiple.

This transaction shows foreign funds are increasing its presence in Japan. Large local funds, such as Unison, Advantage and Nomura Principal, used to own a lion's share in the large cap buyouts in Japan, but this in no longer the case. Bain, Carlyle and Permira have substantially benefited from the vacuum created in Japan's large cap space. Recent large transactions done by their Japan teams are secondaries bought from Japanese GPs without an exception.

Nippon Mirai Sold Gourmet PIA to Jorudan Co.

Nippon Mirai Capital announced that the mid-sized buyout firm has sold its holdings of Gourmet PIA Network Co., a restaurant-related information provider, to Jorudan Co., Ltd., a transportation-related information provider. Jourdan paid JPY 330 million (USD 4.2 million) to acquire a 100% stake in Gourmet PIA, which had a revenue of approx. USD 6 million with very small pre-tax losses in the past 3 years.  Nippon Mirai invested in Gourmet PIA in June 2005.

NEXT Capital Bought A Cooking School Operator For Turnaround

PE Asia reported that Next Capital Partners has acquired Tokyo-based cooking school operator Sunrich for JPY 500 million (USD 6.3 million).  Sunrich and its subsidiary Homemade Association run 114 cooking schools plus 150 franchise schools in Japan. The acquisition is a distressed investment and makes the first investment from the firm’s second fund. A second investment is expected in September, a NEXT spokeswoman  said.

Advantage Partner's Portfolio Company Rex To Be Taken By Colowide Via DES

Rex Holding Co, the holding company of several restaurant chains and a portfolio company of Advantage Partners, will become majority-owned by Colowide Co. (7616), the parent firm of several chains of Japanese-style pubs. Currently Rex is 32% owned by its founder and at least 55% owned by the funds advised by Advantage Partners.

Last Friday, Colowide announced that it will acquire a 66.6% stake of Rex through a debt-equity swap. Colowide has agreed to purchase outstanding bank loans from the lenders for JPY 13.7 billion (USD 175 million). While the total notional of the loans purchased was not disclosed, it should occupy a substantial part of Rex's USD 800 million liability (as of Dec 2012).

Aggressive business expansion in early-mid 2000s has caused Rex to suffer from heavy interest payments. Since Advantage funds acquired approx. 90% of the company in December 2006, Rex has been restructuring its business by selling convenience store chain operator am/pm in 2009, Red Robster in 2012 and super market chain Seijo Ishii in 2012. While the liability on its B/S was reduced by approx. USD 640 million between 2011 and 2012,  apparently it was not enough for the company to turn around. The sale of Seijo brought USD 215 million profit to Rex turning its pre-tax profit into black in 2012 , while the sale of am/pm in 2009 caused USD 95 million loss, according to Colowide's press release.

Advantage paid approx. JPY 7 billion to delist Rex from Tokyo stock exchange in December 2006. This deal will certainly pull down the performance of Advantage III fund eating up a portion of the large profit realized by the sale of Pokka Corp. last year.

Japan' s Largest Pension Fund to Study Alternative Investment Scheme

Last week, Government Pension Investment Fund, the largest public pension fund in Japan with USD 1.37 trillion AUM, collected proposals from the companies interested in conducting a research on the subject of "a possible alternative investment scheme at GPIF".  GPIF had announced a public tender a month ago and the tender winner is expected to complete the work by February next year.  In 2011, GPIF gave a research mandate on private equity to Towers Watson and another on infrastructure to Mercer through the same tender process.

Aozora Bank, Majority-Owned By Cerberus, Pushes Back Government's Preferred Shares Conversion Deadline By 10 Years

On Monday 27th, Aozora Bank Ltd., the successor institution to failed Nippon Credit Bank majority-owned by Cerberus Capital Management LP, said it has agreed with the Japanese government to repay public funds in installments over the next decade. It will make an initial upfront payment to the government of JPY 22.7 billion (USD 288 million) and then pay it JPY 20.49 billion annually until 2022.　

When the government injected public funds into the bank in 1999 and 2000, the state received convertible preferred shares worth JPY 320 billion (USD 4.1 billion), of which JPY 180 billion worth remain outstanding.

This deal pushes back the mandatory conversion of the government's preferred shares until 2022. One tranche of the preferred shares was due for conversion in October.

To generate funds for the repayment, Aozora plans to reduce its capital base from JPY 420 billion (USD 5.4 billion) to JPY 100 billion. Aozora will also buy back 330 million shares, or about a fifth of shares issued, and boost its dividend payout from 30% to 40% of earnings, one of the highest ratios among Japanese banks.

The plan is subject to the approval of shareholders at an extraordinary meeting on Sept. 27.

Aozora Bank shares jumped 20% at the news as the retail investors welcomed the proposal for share buybacks and dividend payout ratio increase.

Daikin To Buy Goodman From Hellman & Friedman for USD 3.8 Billion

Daikin Industries Ltd. (6367) will acquire Goodman Global Inc., the leading manufacturer of home air conditioners in the U.S., for roughly JPY 296 billion (USD 3.8 billion) from Hellman & Friedman LLC. The acquisition would be one of the largest yet this year by a Japanese manufacturer.

Daikin's air conditioning segment rang up sales of JPY 1.04 trillion (USD 13.2 billion) in fiscal 2011, making the firm No. 1 in the global market. With Goodman's sales, the sales will increase to JPY 1.2 trillion (USD 15.2 billion). 

Back in the spring of 2010, Daikin launched talks to acquire the U.S. firm in a deal that could have cost as much as JPY 350 billion. The negotiation was halted after the March 2011 earthquake. Daikin apparently restarted the talks aided by a strong JPY currency and urged by increased competition from Chinese manufacturers.

Currently Daikin shares are trading at 5.5 % below the yesterday's closing price.

KKR To Invest USD 1.27 Billion To Take Over Renesas Electronics

The Nikkei reported this morning that Kohlberg Kravis Roberts & Co. has decided to take over management of Renesas Electronics Corp. (6723) by spending JPY 100 billion (USD 1.27 billion) to acquire new shares from the struggling chipmaker.

KKR has presented its proposal to Renesas' three major shareholders, NEC Corp. (6701), Hitachi Ltd. (6501) and Mitsubishi Electric Corp. (6503), as well as the chipmaker's main banks. It hopes to reach a formal agreement as early as next month and to own a majority stake of the company by December.

Renesas has a market capitalization of about JPY 95 billion (USD 1.21 billion) . By seeking more than 5,000 voluntary early retirements and closing down some facilities, it expects to report an extraordinary loss of 150 billion yen for the current fiscal year. Renesas also plans to eliminate up to 14,000 jobs (roughly 30% of its workforce) and shut or sell nine domestic plants within three years.

NEC, Hitachi and Mitsubishi Electric have already agreed to provide a total of JY 50 billion (USD 630 million) through loans and other measures and 4 major banks are prepared to lend up to JPY 50 billion (USD 630 million) in total.

According to the Nikkei report, Renesas had requested that KKR spend JPY 50 billion (USD 630 million) on a private placement of new shares. But KKR apparently determined that it needs to take management control for a quicker restructuring and KKR may replace Renesas' management if the US fund becomes unsatisfied with the restructuring progress.

The news sent Renesas shares more than 30% higher this morning.

Sharp Divestments Will Provide Opportunities For PE Funds

Sharp Corp. (6753) reportedly plans to sell its information equipment business (copiers etc., JPY 277.5 billion / USD 3.5 billion in sales), electronic devices business (LED lighting etc., JPY181.2 billion / USD 2.3 billion in sales) and air conditioning equipment business (JPY 53.5 billion /USD 0.7 billion in sales).

Sharp may also invited a JV partner to operate its main plant in Kameyama, which makes LCD panels for Apple. It may also have other firms operate its TV assembly plant in Mexico and solar cell production facilities. It will sell its 0.6% stake in Olympus (7733) and possibly its 9.8% interest in lithium ion battery joint venture Eliiy Power Co.

Kyocera (6971), Daiwa House (1925) and Daikin Industries (6367) are among the firms to have reportedly expressed interest in buying them. According to our source, a few private equity firms have been in contact with Sharp.

Bracing for a huge net loss this fiscal year, Sharp seeks to get back on its feet by focusing on such fields as LCDs, mobile phones and white goods. With about JPY 200 billion (USD 2.5 billion)  in convertible bonds set to mature in autumn of next year, Sharp is in need of cash.

Japan Airlines to Be Re-listed, Bringing a Profit to ETIC

Japan Airlines Co. will be re-listed on the Tokyo Stock Exchange on 19 September 2012.

JAL filed for a bankruptcy on 19 January 2010 and received capital injection of JPY 350 billion (USD 4.5 billion) from the state-backed Enterprise Turnaround Initiative Corp. of Japan (ETIC). Having wiped out all of the shareholder equity 2.5 years ago, JAL has engaged in substantial corporate restructuring - reducing its flight routes and employees by 40% and cutting pension obligations and the number of subsidiaries by a half. It reported JPY 200 billion (USD 2.5 billion) operating profit in FY 2012.

ETIC, which owns approx. 96% of the carrier, will be selling its entire holdings at the listing. While the actual offering price will be set on 10 September, EITC would nearly double its investments if the price is set at JPY 3790, as reported by a media.

Banks to Be Allowed to Hold More Than 5% of Non-Financial Companies

The Financial Services Agency plans to relax the rule limiting bank stakes in non-financial companies to 5%, The Nikkei reported. By lifting the cap on ownership to 10-20%, the FSA hopes to nudge banks, particularly regional financial institutions, into helping struggling companies get back on their feet. If regional banks become able to provide more capital in addition to loans, it would stabilize smaller businesses' cash flows and could spark fresh capital investment. There have been calls within the ruling Democratic Party of Japan to relax the rule to encourage the growth of local economies.

INCJ to Invest JPY 10 Billion in Lithium Ion Battery JV

The Innovation Network Corp. of Japan will invest JPY 10 billion (USD 125 million) in a joint venture with Kureha Corp. (4023), Kuraray Co. (3405) and Itochu Corp. (8001) to mass-produce a cutting-edge lithium ion battery material at home and abroad. The 3 strategic partners will jointly contribute JPY 10 billion to the JV. Kureha and Kuraray have established processes to produce plant-derived material to be used in battery electrodes that can halve the time required to charge electric and plug-in hybrid vehicles, as well as improve battery durability by as much as 30%.

Polaris III First Close with JPY 20 Billion

Polaris Capital Group has announced that its 3rd fund had the first closing on July 11th with approximately JPY 20 billion (USD 250 million) commitments from investors. Polaris III aims to raise between JPY 30 to 40 billion. According to the press release, Polaris I has realized almost two-thirds of investments and expects to achieve full exits in a couple of months. Polaris II is now fully invested.

http://www.polaris-cg.com/topics/20120730-E.pdf

Polaris to Acquire a 30% Stake in Myland

Polaris Capital Group will acquire a 30% stake in Myland Real Estate Co. by investing in slightly over JPY 2 billion (USD 25 million) through a private placement. Myland buys existing homes, renovates and sells them to first-time home buyers. It has agencies in 46 of Japan's 47 prefectures and takes in about JPY 30 billion (USD 375 million) in annual sales. According to the Nikkei report, Myland aims to go public in a few years working with Polaris. Myland is the 3rd investment for Polaris in the past 12 months, while it sold the holdings in 3 other portfolio companies during the same period.

Defta Partners to Establish a Japan-focused VC Fund

Defta Partners will establish a VC fund focusing on telecom, healthcare, environments and energy sectors through its Japanese subsidiary, Defta Capital. The fund size will be between JPY 2 - 3 billion (USD 25 - 37 million). Defta Capital will be moving its HQ from to Tokyo to Yokohama in Kanagawa Pref.  Kanagawa Pref. has been implementing policy measures to support venture companies to facilitate their growth.

Japan Buyout Monthly June 2012

is out now.

If you would like to receive our monthly letter, please click the link in the right box or kindly send email to:
mail@brightrust.jp with your name (Mr/Ms/Dr), company name/address/website.

FT: Corporate Japan Back on Track

A good summary of overseas M&As by Japanese corporations - historical and current - by FT.

http://on.ft.com/LH7Dq1

Open Door To Foreign Property Acquisitions By Japanese REITs

A bill to allow to Japanese listed REITs to own a majority stake of foreign real estate special-purpose companies will be submitted to the Diet next year. Currently REITs cannot own majority stakes in firms. The revisions would make an exception for overseas SPCs, which would practically open the door to foreign property acquisitions by Japanese REITs. Japanese REITs' total market capitalization has shrunk to around 3.5 trillion yen (44 billion dollars) , down from nearly 7 trillion yen (88 billion dollars) in 2007.

Unison And RJH Prepare For Exits

According to Mergermarket, Unison Capital is in the process of divesting Akindo Sushiro and UCOM and RJH is looking for a buyer for its portfolio company, Shaklee Japan.
Unison invested in Akindo Sushiro in September 2007 and took the operator of conveyor belt sushi chains private through TOB in 2008. Unison invested in UCOM, an operator of fiber-optic communications, in Mar 2007 and have done a few add-on investments. RJH bought Shaklee Japan in 2004.

Japan to Set Up A Fund To Support PFI Projects

A bill to establish a government-sponsored fund that will invest in, or lend to, PFI projects in renewable energy and infrastructure is being discussed at the Japanese diet. Once the bill is approved, the Government will seed the fund with 5 billion yen (60 million dollars) and invite private companies to add up capital. Going forward, the Government will provide loan guarantees and additional capital to enable the fund to cope with much larger financing requirements. This fund could have a similar structure as Innovation Network Corporation of Japan, which now has as much as 24 billion dollar investment capacity. According to a press, the Ministry of Land, Infrastructure, Transport and Tourism plans to sell management rights of Japanese airports, such as Sendai and Kansai.

INCJ to Buy 42% of Nistica from Fujikura

The Innovation Network of Corporation of Japan (INCJ) announced that it will acquire 42% of Nistica, a US-based company that supplies wavelength selective switches to network equipment manufacturers, from Fujikura Ltd. Fujikura has been investing in Nistica since 2007 and had acquired the majority in April 2012. Fujikura will continue its 52% ownership alongside with INCJ (42%) and NTT Electronics Corp (6%).  The transaction value was not disclosed.

Consolidation In Consumer Electronics Retailer Industry

Yamada Denki Co., Japan's top consumer electronics retailer, will acquire its smaller peer Best Denki Co.. This will lift its annual sales above 2 trillion yen (25 billion dollars). Best Denki, now the No. 8 player, once led the industry, but the acquisition of Sakuraya Co. in 2006 and other missteps have led to its decline.
Bic Camera Inc. just last month converted 7th-ranked Kojima Co. into a subsidiary and rose to the 2nd-biggest consumer electronics retailer in Japan from its previous perch at No. 5. This has left Best Denki looking for a new partner in the increasingly competitive market.

Japan's May Current Account Surplus Narrowed

Japan's current account surplus was 215.1 billion yen in May. It narrowed 62.6% from a year earlier and was much smaller than economists expectation of 511 billion yen. The trade and service balance posted a deficit of 941 billion yen (yes, Japan's trade balance has been in deficit since 2011) as the result of increased LNG imports and decreased exports to Europe. Income surplus, though fell by 11.7% to 1, 274 billion yen, still more than offsets trade balance deficit.

Mori Trust President To Set Up An Investment Company

Nikkei reported that Mori Trust president, Mr. Mori, will set up an investment company which will invest in Japanese and non-Japanese companies to help them expand business locally and globally. Mr. Mori will capitalize the company with 16 billion yen (USD 200 million). Not much details are available at this point.

Goldman To Launch A Private REIT Targeting At JPY 300 Billion

According to a Bloomberg report, Goldman Sachs Group Inc. plans to expand its new private real estate investment trust to as much as 300 billion yen ($3.7 billion) to buy Japanese properties, as it foresees a turnaround in prices. GS aims to launch a private REIT, a product recently introduced in Japan, with the initial target of 30 billion yen in this August. Mitsubishi Estate Co., Mitsui Fudosan Co. and Nomura Real Estate Holdings Inc. have set up private REITs in the past 12 months. According to a Hong Kong-based S&P professional cited in the Bloomberg article, “Japan is in a different cycle compared with other markets in Asia-Pacific.The other markets are coming off from a cyclical top so they are well under way for correction. Japan has been in correction for some time now, so it’s on its way for a recovery.”

J-REITs account for 8.3 trillion yen of Japan’s 23.2 trillion real estate investment market, while private equity real estate funds represents the rest ( =15 trillion yen). The size of private REIT market, however, is estimated to be less than $2 billion.


Japan’s $3.36 trillion in pension money is the world’s second-largest after the US. According to Towers Watson, Japanese pensions have 31 percent of investments in equities and 59 percent in bonds, with only 6 percent in alternative assets.

Tokyo / Osaka Stock Exchange Merger To Be Approved

The Japan Fair Trade Commission will give the go-ahead to the planned merger between Tokyo Stock Exchange Group Inc. and Osaka Securities Exchange Co. (8697). The commission is expected to officially approve the merger sometime this week. The TSE will launch a tender offer for the OSE as soon as the announcement is made. The merger will be completed by next January with the creation of a holding company. The combined exchange will be the 3rd largest exchange in terms of the aggregate market capitalization of the companies listed.

BOJ Sees Economy Improving in All 9 Regions in Japan

The Bank of Japan upgraded its assessment of all nine economic regions in Japan in July. This was the first time since October 2009 that all regions have been upgraded in the bank's quarterly Regional Economic Report. The report was released at a meeting of managers from the central bank's 32 domestic branches and general managers based in the U.S. and Europe.

The BOJ sees the nation's economy recovering steadily on the back of domestic demand. Most regions see a mild recovery or pickup in the economy. Seven regions see consumption increasing or picking up, while eight regions noted a rise or pick up in capital spending.

Tokyo Metropolitan Government to Back VC Investments

Tokyo Metropolitan Government has appointed Daiwa Corporate Investment to manage Tokyo Metropolitan Government backed VC fund. Tokyo will provide JPY 2 billion (USD 25 million) to seed the fund. The fund will provide risk capital to prospective venture companies in such areas as energy, environments, semiconductors and electrical parts.

INCJ Tops Up Capital

Innovation Network Corporation of Japan (INCJ) has increased its capital base by allocating shares to 8 Japanese companies - Cannon, Sony, Toyota, Marubeni, Sumitomo Mitsui Bank, Mitsubishi Chemical, Mitsusbishi Heavy Industries and Mitsubishi Corp with JPY 500 million each totaling to JPY 4 billion (USD 50 million). While this brings INCJ's private sector shareholder ownership to JPY 13 billion (USD 160 million) by 26 companies, it merely accounts for 8.3 % of its total capitalization. The Government has been continuously adding capital to INCJ and it is now reaching USD 1.8 billion. As the result, the private sector ownership has been on decline, obscuring INCJ's position as a public-private entity. Considering its total investable capital of over USD 20 billion, which is made available to INCJ through the Government guaranteed loans, the USD 50 million share allotment is nothing but a symbolic act.

Japan's Overseas M&As Hit Record High in H1 2012

The number of overseas M&As by Japanese businesses in the first 6 months of 2012 rose by 15% from H1 2011 to 262, topping the previous record of 247 in 1990. The M&A deals totaled JPY 3.49 trillion (USD 44 billion), up 9% from a year earlier. The tally is the second highest after the 4.46 trillion yen in H1 2006, according to M&A advisory firm Recof Corp.

The first half of this year featured large-scale acquisitions by trading houses. Mitsubishi Corp. paid JPY 230 billion (USD 2.9 billion) to acquire concession rights to a natural gas field in Canada. Marubeni Corp. purchased major U.S. grain firm Gavilon LLC for roughly JPY 300 billion (USD 3.8 billion).

Mid-tier regional companies also acquired foreign companies as well. Taiho Kogyo Co. acquired the No. 1 Chinese aluminum bearing maker, while Chubu Yakuhin Co., a drugstore chain operator obtained a stake in a Chinese drugstore company. In addition, smaller firms also appear to have acquired overseas businesses to follow their customers' moves. Of the M&As with disclosed price tags, small deals worth less than JPY 1 billion (USD 12million) accounted for nearly 40%.

KKR Might Invest In Troubled Chip Maker Renesas Elec.

According to The Nikkei, Renesas Electronics Co., a struggling chipmaker, hopes to raise its capital by issuing roughly 50 billion yen in new shares to Kohlberg Kravis Roberts & Co., an US-based investment firm. Renesas announced it posted a group net loss of 62.6 billion yen for the year ended March. This is the second straight year to post a net loss. As a result, Renesas need structural reforms as well as financial supports. Renessa's major shareholders NEC Corp. , Hitachi Ltd., and Mitsubishi Electric Corp.. are ready to provide financial assistances.

Sumitomo To Sell Half Shares Of TV Shopping Co. To Bain

Sumitomo Corporation, a major trading house in Japan, announced that Sumitomo sold a 50% stake in subsidary Jupiter Shop Channel Co., Ltd., the largest TV shopping company in Japan, to Bain Capital. With integrating Bain's knowledge and worldwide network into the robust business foundation by Jupitar, Sumitomo will increase Jupiter's corporate value through the expansion of its customer base, improvement of cost competitiveness and promotion of expansion into Asia.Bain Capital in Japan has acquired Bellsystem 24, a leading call-center operator, in 2009 and Skylark, a major family-restaurant chain operator, in 2011.

Recruit Co To Invest In US, Asian Start-Ups

Recuit Co., a major information service provider, has set up 2 funds, valued at approximately 3 billion yen in total, to invest in promising internet start-up firms in Asia and the US, according to The Nikkei. Recruit will focus on investment in next-generation technologies in the US using the 1 billion yen fund and set aside the rest for opportunities in Asia. The company has already set up an office in California's Silicon Valley area.

WL Ross-backed OHIZUMI MFG. To Go Public

OHIZUMI MFG. Co., Ltd., a temperature sensors-based electrical parts manufacturer, announced that OHIZUMI will be listed on The Tokyo Stock Exchange on the 22nd of June. OHIZUMI has expanded worldwide since WL Ross & Co. LLC, a global turnaround group, invested in January 2003.

Polaris To Sell Some Shares In Ekitan

Polaris Capital Group Co., Ltd., a leading private equity firm, annnounced Polaris sold a portion of the shares(26.2%) in Ekitan & Co. Ltd., a listed traffic-related information provider, to CSI, a listed health-related information provider. Polaris acquired Ekitan in October 2007 via MBO from Toshiba. Ekitan went public in March 2011. Polaris still hold the about 25% share in Ekitan as a major shareholder.

TPG To Sponsor Failed Condo. Developer

Joint Corporation, a failed condominium-focused real estate developer, announced that TPG, a global private equity firm, and Savills Japan, a London-based real estate service provider, acquired all shares of Joint Corporation from its former sponsor Reno Corp.. Their joint venture, TPG Savills Financial Holdings, Ltd., will manage the failed but recovering developer. Joint went bankrupt in May 2009.

MUL Principal To Exit Investment In Tarami

Mitsubishi UFJ Lease & Finance Co., Ltd., a major leasing company, announced its investment unit MUL Principal Investment Co., Ltd., has sold all shares of Tarami Co., a Nagasaki-based fruit jelly producer, to DyDo DRINKO, INC., a leading soft drink maker. MUL Principal invested in October 2009.

ALC To Go Private Via MBO With Nippon Mirai Capital

ALC Press Inc., a listed language-focused educational service provider, announced that ALC approved a tender offer from an investment vehicle by Nippon Mirai Capital Co., Ltd., a medium-sized private equity firm. The TOB price is set at 27,500 yen, a 33.73% premium over its 3-month average. Shinsei Bank is ready to provide up to 2.6 billion yen in financing. ALC went public in August 2006.

Asahi To Acquire Beverage Maker From Ajinomoto

Asahi Group Holdings Ltd., a beer-based beverage conglomerate, announced that Asahi will acquire all outstanding shares of Calpis Cp., Ltd., a soft drink maker, from Ajinomoto Co., Inc., a major seasoning manufacturer. Asahi will pay about 119 billion yen. Calpis is proud of its 107 billion yen in sales as of March 2012. Asahi aims to expand its soft drink business through this deal, and will become the No.3 player following Coca-Cola and Suntory Beverage & Food Ltd. Ajinomoto purchased Calpis in 2007.

Daiwa PI To Exit Investment In Meisei Elec.

IHI Corp.,  a heavy industrial machines conglomerate, announced that IHI has made a tender offer for Meisei Electric Company, a PE-backed measuring equipments manufacturer. The TOB price is set at 90 yen, an 8.16% discount to its 3-month average. Major shareholders Daiwa SMBC Principal Investment Co., an investment unit of Daiwa Securities Group and NEC agreed to the offer. Meisei will remain on the stock exchange after the deal. Daiwa invested in Feburary 2003.

New Horizon To Exit Investment In Housetec

New Horizon Capital Co., Ltd., an independent private equity firm, announced that New Horizon and Yamada Denki Co., Ltd., a major mass discount home electronics retailer, signed a share-transfer agreement for all shares of Housetec Holdings, a housing equipment and environmental facilities manufacturer. New Horizon acquired struggling Housetec from Hitachi Chemical in January 2008. Yamada Denki has been an aggressive M&A player, purchasing SXL Co., Ltd., a listed house maker, from Nomura investment group in August 2011.

Unison To Acquire Showa Yakuhin From Funds

Unison Capital, Inc., a major private equity firm, announced that Unison will acquire all shares of Showa Yakuhin Kako Co., Ltd., a medium-sized pharmaceutical company, held by Tokio Marine Capital, Polaris Capital Group, and PineBridge Japan Partners. They invested in April 2008.

Asahi To Acquire Beverage Maker From Ajinomoto

Asahi Group Holdings Ltd., a beer-based beverage conglomerate, announced that Asahi will acquire all outstanding shares of Calpis Co., Ltd., a soft drink maker, from Ajinomoto Co., Inc., a major seasoning manufacturer. Asahi will pay about 100 billion yen to Ajinomoto. Calpis is proud of its 107 billion yen net sales as of March 2012. Asahi is aiming to expand its soft drink business through this deal and will become the No.3 player following the Coca-Cola group and Suntory Beverage & Food Ltd..

Micron Picked To Sponsor Failed Elpida

Elpida Memory Inc., a bankrupt DRAM maker, has informally announced its choice of major US chipmaker Micron Technology Inc. as the sponsor of its rehabilitation efforts, according to the Nikkei. Micron is expected to pay more than 200 billion yen to acquire Elpida. In the second round of bidding held last Friday, a consortium of China's Hony Capital and US-based TPG Capital also participated and failed. The Korean chip maker SK Hynix Inc. announced before the auction that it won't be proceeding with a bid for Elpida. SK Hynix once said that it might work with possible partners such as Toshiba to bid. Consequently there are no major Japanese electronics manufacturers who are engaged in the global DRAM market that they once dominated.

Biznet To Go Private

Biznet Corp., an office supply procurement servicer, announced that Biznet approved a tender offer from its parent company Plus Co. The TOB price is set at 102 yen, a 36% premium over its 3-month average. Plus Co. is a stationary manufacturer as well as a 49% shareholder of Biznet. Biznet went public in August 2005.

Mitsubishi, Canada's OMERS To Launch Infra Fund

Mitsubishi Corp., a major trading company, announced that Mitsubishi will participate in one of the world's largest infrastructure investment alliances, the Global Strategic Investment Alliance (GSIA), to invest in large-scale infrastructure assets mainly in North America and Europe. Mitsubishi is looking to jointly invest up to $2.5 billion with leading Japanese pension fund Pension Fund Association, Japan Bank for International Cooperation, and Mizuho Corporate Bank. The GSIA is a world-wide alliance that aims to raise $20 billion, led by Canada's leading pension plan, the Ontario Municipal Employees Retirement System (OMERS).

Salesforce.com To Invest In PE-backed SIer

1st Holdings Group, a listed business software developer, announced that Salesforce.com., a US-based enterprise cloud computing company, acquired shares in 1st for about 50 million yen. 1st provides its products to Salesforce's business lineups. Advantage Partners, a Tokyo-based private equity firm, invested in 2004 and is the top shareholder in 1st Holdings.

AvanStrate To Postpone Going Public Again

AvanStrate Inc., a Carlyle-backed LCD glass substrate maker, announced that it decided to postpone its IPO due to various circumstances including recent stock market trends. This is the second time it has postponed its IPO since the big earthquake in March of last year.

ABLE & PARTNERS Goes To Private

ABLE & PARTNERS Inc., a listed real estate broker, announced that ABLE & PARTNERS approve a tender offer from an investment entity set up by its CEO Shigeru Sato. The TOB price is set at 580 yen, a 44.3% premium over its 3 month average. Risona Bank and the Bank of Tokyo-Mitsubishi UFJ are ready to provide as much as 34.4 billion yen in financing.

Nidec To Aquire Italian Motor Maker From Fund

Nidec Corp., a Japanese precision motor manufacturer, announced that Nidec acquire all of the shares in Ansaldo Sistemi Industriali S.p. A., an Italian long-established industrial motor manufacturer, from Patriarch Partners, LLC, a US turnaround-foucused private equity firm, via its portfolio company. Thorugh this acquisition Nidec become to have significant sales in Europe, China, India, Russia and the Middle East. In US Nidec purchased Motors & Controls Business of Emerson Electric Co. in September 2010 to streangthen its industrial motor business in North and South America. Nidec has been famous as an aggressive M&A player.

Hony Capital With TPG To Bid For Failed Elpida

China's Hony Capital and US investment fund TPG will make a joint bid for the failed Elpida Memory Inc., according to The Nikkei. Hony Capital, a Chinese private equity firm, is under the umbrella of Lenovo's top shareholder, Legend Holdings Ltd. Lenovo Group might hold concerns about losing a key memory chip supplier to US or Korean rivals. So far the potential bidders are US chipmaker Micron Technology Inc., a team of Toshiba and SK Hynix Inc., and Hony Capital with TPG

Toshiba, Hynix May Launch Joint Bid For Failed Elpida

Toshiba Corp., an electrical conglomerate, is considering a joint bid with South Korea's SK Hynix Inc., for bankrupt DRAM chip manufacturer Elpida Memory Inc., according to The Nikkei. At present, US-based Micron Technology Inc. appears to have been a favorite sponsor. In additon to them, an investment fund is also expected to participate in the round of bidding, slated to close at the end of April. Elpida is expected to pick its turnaroud sponsor as early as May.

CAS Capital Exits Japanese Restaurants Operator

Orix Co., a lease-based financial conglomerate, announced that Orix acquired all shares in Kinrei Corp., a PE-backed Japanese cuisine restaurants operator, from CAS Capital., a Tokyo-based midsized private equity firm. CAS invested in 2005. Kinrei also produces and distributes frozen foods to convenience stores, and with Orix will expand its businesses overseas.

Riverside Exits Japanese Car Parking Operator

The Riverside Company, a US-based private equity firm, announced that its Riverside Asia Pacific Fund Ⅰ sold all their shares in Shinsoki co., a Japanese coin parking lot operator to iSigma Capital, a mid-targeted private equity firm. Riverside invested in Shinsouki in 2008 and rolled up an another operator in 2009. This is the first exit for Riverside Asia Pacific Fund Ⅰ.

PE-backed LCD Maker To Go Public

Tokyo Stock Exchange announced that shares of Avanstrate Inc., a LCD glass manufacturer, will be listed on the exchange on the 24th 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%). Carlyle once tried to make it go public last April but the plan was cancelled after the March 11 Earthquake.

Sony To Divest Chemical Unit To DBJ

Sony Corp., an electronics conglomerate, announced that Sony will sell its chemical unit, Sony Chemical & Information Device Corp. (SCID) to Development Bank of Japan Inc (DBJ)., a state-owned investment bank. SCID has about 3,000 employees and operations in Japan, US, Europe, and China. It reported sales of 111 billion yen last year. This sale is the latest move by Sony, which is focusing on realignment as a key initiative of its business portfolio.

INCJ To Invest In UK Wind Farm Operator

Innovation Network of Corporation Japan (INCJ)., a public-private investment fund, announced that Marubeni Co., a major trading house, and INCJ acquired Seajacks International Ltd, a UK-based offshore wind power service provider, from Riverstone Holding LLC., an energy-focused private equity firm. The Japanese trading house and the public-private fund will each obtain a 50% stake in the UK firm.

Venture Republic To Go Private via MBO

Venture Republic Inc., an internet commerce supporting company, announced that Venture Republic approved a tender offer from an investment vehicle by Kei Shibata, the CEO of Venture Republic. The TOB price is set at 1,100 yen, a 37.3% premium over a 3-month average. The largest shareholder Lawson Co., a major convenience store operator, agreed to the offer. The Bank of Tokyo-Mitsubishi UFJ is ready to provide up to 2.2 billion yen in financing. Venture Republic will be delisted upon the successful outcome of this deal. The company went public in August 2008.

NEC Tokin To Ally With KEMET

NEC Tokin Co., a leading manufacturer of tantalum capacitors, announced that NEC Tokin agreed to form a capital and business alliance with KEMET Co., a US-based manufacturer of capacitors, as part of efforts to strengthen its financial base, increase sales, and reduce costs in areas such as procurement and production. KEMET is also given the option to subscribe to future capital increases of NEC Tokin or acquire its shares held by NEC Corporation, its parent company. NEC expects to post a consolidated net loss of 100 billion yen in the current business year ending March 31, due to massive flooding in Thailand and sluggish mobile phone operations.

Japan Industrial Solutions Fund To Invest In Sumco

Japan Industrial Solutions Co. Ltd., a turnaround-flavored private equity firm, announced that JIS Fund 1 will acquire new shares issued by Sumco Co., a silicon wafer maker. Sumco, originally a joint venture between Sumitomo Metal and Mitsubishi Materials, has marked its third straight year in the red. Japan Industrial Solutions, which was set up by Development Bank of Japan and Japanese mega banks etc, has so far invested in Joban Kosan Co., a Fukushima-based resort facilities operator, which was battered heavily by the earthquake. This time JIS will play a major role in ensuring that Sumco carries out its restructuring plan.

Family Mart To Acquire PE-backed Food Service Operator

Family Mart Co., Ltd., a major convenience store operator, announced that Family Mart will acquire Senior Life Create Co., Ltd., an elderly-focused meal service provider. They will purchase a 81.6% share of the firm from a buyout fund and other VCs. The major shareholder Basic Capital Management, a Tokyo-based midsized private equity firm, invested in June 2006. Family Mart will increase its base of service lineups in the nationwide convenience stores with this acquisition.

Longreach To Exit Investment In Logistics Company

Mitsui-Soko Co., Ltd., a major warehousing company, announced that Mitsui-Soko will acquire all outstanding shares of Sanyo Electric Logistics Co., Ltd., a PE-backed logistics company, from The Longreach Group, a midsize private equity firm, for 24.2 billion yen. Longreach invested in May 2010.

LIFENET Insurance To Go Public

LIFENET Insurance Company, a Japanese online insurer, announced that LIFENET will list on the Tokyo Stock Exchange on the 15th of March. Monex Group, an online broker-based financial group, and venture capital companies invested in this LIFENET, which has expanded its operations rapidly through low-cost online services. It was originally founded in October 2006 by President Haruaki Deguchi, ex Nippon Life Insurance manager.

RHJ To Exit Investment In Resort Facilities

Sega Samy Holdings Inc., a pachinko-based entertainment company, annnounced that Sega Samy acquired all shares in Phoenix Resort KK from RHJ International, a private equity firm, for 400 million yen. Phoenix Resort has hotels, spas, golf courses restaurants and international conference halls in Miyazaki prefecture, located in the southern part of Japan. PHJ invested in May 2001. Sega Samy, in addition to payment for the shares, plans to lend 5.4 billion yen for the repayment of its loan.

Star Cable Network To Be Delisted Via Tender Offer

Star Cable Network, a Nagoya-based CATV operator, announced that Star Cable Network approved a tender offer from Community Network Center Inc (CNCI)., a private Nagoya-based holding company of 8 CATV operators. The TOB price is set at 79,300 yen, a 74.7% premium over its 3-month average. Star Cable will be delisted upon the successful outcome of the deal. CNCI is the third largest CATV operator behind J:Com and JCN.

Trust Banks To Go Heavy On Domestic Bonds In FY12 Pension Investing

Shifting to a defensive posture, three of the biggest trust banks will raise the domestic-bond weightings of their standard portfolio for corporate pension funds next fiscal year, according to the Nikkei. Their average Japanese bond allocation will rise to 38.5%, the highest level in a decade and more than 10 percentage points higher than the near-term low in fiscal 2007. Most of this category consists of government bonds. At the same time, trust banks will trim pension funds' exposure to equities to shield investors from the European debt crisis and other risks. The figures are for balanced portfolios managed by Sumitomo Trust, Mitsubishi UFJ Trust, Mizuho Trust and Resona Bank. The standard portfolios consist of foreign and domestic stocks and bonds. Expected returns are around 4%.

UNY To Make Its Convenience Store Private

UNY Co. Ltd., a major chain store operator for general retail services, announced that UNY make a tender offer for Circle K Sunkus Co., an UNY Group conveniece store operator. The TOB price is set at 1,780 yen, a 40% premium over a 3 month average. UNY is the lagerst shareholder(47.28%)of Circle K Sunkus, approve the offer. Circle K Sunkus will be delisted upon the successful outcome of the deal.

Kozosushi To Go Private Via Tender Offer

Kozosushi So-Honbu Co., Ltd., a nationwide franchiser of take-out sushi restaurants, announced Kozosushi approve the tender offer from an investment vehicle by Ikuo Kimura, an experienced entrepreneur. The TOB price is set at 140 yen, a 8.5% discount to a 3 month average. Kozoshushi's largest shareholder Skylark Co. Ltd., a Bain-backed family restaurants operator, agreed to the offer.

D.A. Consortium To Acquire ngi group via Tender Offer

D.A. Consortium Inc., a internet-based advertisement company, announced that DA Consortium make a tender offer for ngi group, inc., an internet business company. The TOB price is set at 324 yen, a 44% premium over a 3 month average. DA Consortium belongs to Hakuhodo Group, a major advertisement company. ngi focuses on venture capital business as well as advertisement services on internet.

Glory To Purchase Talaris Topco From Carlyle Europe

Glory Ltd., a major money handling machine manufacturer, announced that Glory acquire all of outstanding shares of Talaris Topco Ltd., PE-backed English provider of cash handling equipment and software solutions. The consideration for the acquisition is expected to be about 650 million pounds. Carlyle Europe funds invested in September 2008. Through the acquisition, Glory will accelerate the overseas business.

Takasago Engineering To Acquire Building Maintenance Firm Via Tender Offer

Takasago Thermal Engineering Co., Ltd. , a major airconditioning engineering company, announced that Takasago make a tender offer for Marusei Co., Ltd., a medium-sized building maintenance company. Marusei approved the offer. The TOB price is set at 600 yen, a 43.54 % premium over a 3 month average.

Ushio To Acquire ADTEC Engineering Via Tender offer

Ushio Inc., a light(lamp)-oriented electrical company, announced that Ushio will make a tender offer for ADTEC Engineering Co., Ltd., an exposure systems-based manufacturer. The TOB price is set at 400 yen, a 29.87% premium over a 3 month average. The founding family(its largest shareholder) of ADTEC agreed to the tender offer.

Akatsuki Financial To Tender Offer For Financial Contents Provider

Deamvisor Holdings, an internet-based financial contents provider, announced that Dreamvisor approved the tender offer from Akatsuki Financial Group, a medium-sized financial group. The TOB price is set at 36,000 yen, a 63.82% premium over a 3 month average. Akatsuki holds a securities house, a future commodity house and an asset management company,who will take advantage of Dreamvisor's service. Dreamvisor will remain on the exchange after the deal.

Orix To Acquire Major Liquor Distributor

Orix Co., a lease-oriented financial conglomerate, will buy Kawachiya Corp., a major wholesaler of beer, wine, and spirits, according to Nikkei. Orix will acquire the shares from its founding family and plans to realign the industry, which is full of small, owner-oriented distributors.

Next Capital To Exit Investment In Sato Benec

Next Capital Partners Co., Ltd., a SME-focused private equity firm, announced that Next Capital reached an agreement with Daisen Building Co., Ltd., a private real estate company that Next Capital will sell its 100% share of Sato Benec Co., Ltd., a construction company, to Daisen Building. Next Capital invested in Sato Benec in February 2007.

IHI To Make Group Companies Private Via Tender Offer

IHI Co., one of the major comprehensive heavy electric machinery manufacturers, announced that IHI will make a tender offer for its listed subsidiary, IHI Construction Materials Co., Ltd. The TOB price is set at 175 yen, a 38.89% premium over its 3-month average. IHI will also make another offer for its listed subsidiary, IHI Transport Machinery Co., Ltd.. The TOB price is set at 670 yen, a 52.97% premium over its 3-month average. Both companies will be delisted upon successful outcome of the deals.

Average Group Annuities Inked -8.51% By 3rd Q. 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 8.51% in the cumulative 3rd quarter of fiscal 2011, compared with minus 3.67% a year earlier, according to Nikkei. The poor performance in investment return is mainly attributed to a drop in domestic stock prices and the yen's sharp appreciation.

Benesse To Acquire UP Inc. Via Tender Offer

UP Inc., a listed cram school operator, announced that it approved a tender offer from Benesse Holdings Inc., a leading independent education provider. The TOB price is set at 1050 yen, a 84.9% premium over its 3 month average. UP will delist from the Tokyo Stock Exchange after Benesse's buyout.

NTT Data To Tender Offer For JBIS

JBIS Holdings Inc., a securities industry-focused software company, announced that JBIS approved a tender offer from NTT Data Co., a major system integrator. The TOB price is set at 310 yen, a 31.91% premium over a 3-month average. JBIS will be delisted upon the successful outcome of this deal.

NTT Docomo To Tender Offer For Home Delivery Servicer

Radish Boya Co., Ltd., an organic vegetable home delivery service provider, announced that it approved a tender offer by NTT Docomo Inc. the biggest mobile carrier in Japan. The TOB price is set at 990 yen, a 36.6% premium over its 3-month average. Radish's top shareholder is a buyout fund managed by JAFCO Co.Ltd., a listed private equity firm, who agreed to accept the offer. Upon the successful outcome of this deal, NTT Docomo plans to provide at most a 20% share of Radish to Lawson, a leading convenience store operator, for further business development among the 3 parties.

AP To Acquire Housing Renovator Via Tender Offer

Yasuragi Co., Ltd., a Nagoya Exchange-listed housing renovation and sales company, announced that it approved a tender offer from an investment vehicle by Advantage Partners, a major private equity firm. The TOB price is set at 627 yen, a 82.80% premium over its 3-month average. The deal size is capped at 12.9 billion yen. Yasuragi will be delisted upon a successful outcome of the deal.

Nursing Home Operater To Acquire Nursing Care Provider

Japan Care Service Group Co., a listed nursing care provider, announced that it approved a tender offer by Message Co., Ltd., a listed nursing home operator. The TOB price is set at 345 yen, a 50% premium over a 3-month average. The deal size is about 2.849 billion yen at most.

Parker Hannafin To Tender Offer For TAIYO

TAIYO, Ltd., a listed hydraulic/pneumatic equipment maker, announced that TAIYO approved a tender offer by its largest shareholder (56.49%) Parker-Hannifin Corporation. The TOB price is set at 250 yen, a 103.3% premium over a 3-month average. Parker-Hannifin is a NYSE-listed global leader in motion and control technologies. Parker-Hannifin formed a capital and business alliance with TAIYO in Feb. 2014. TAIYO went public in March 2008.

Fuji Media To Acquire Sankei Building

Fuji Media Holdings Inc., a listed broadcasting holding company, announced that its wholly owned subsidiary Fuji Media Service Inc., will acquire The Sankei Building Co., Ltd., a mid-size real estate developer, through a tender offer. The TOB price is set at 740 yen, a 139% premium over a 3-month average. The deal size is at most 32.83 billion yen. Fuji Media Service is the largest shareholder of Sankei Building (29.85%).

SMFG To Acquire Aircraft Leasing Business From RBS

Sumitomo Mitsui Financial Group, Inc.(SMFG), a major financial conglomerate, announced that SMFG and Sumitomo Corp, a leading trading company, have reached an agreement with The Royal Bank of Scotland Group plc (RBS) on the acquisition of RBS's aircraft business, subject to regulatory approval and clearance. RBS was the fourth largest air-leasing player in the world.

Toyota Tsusho To Tender Offer Electronics Trading Company

Elematec Co., a listed electronics trading company, announced that Elematec approved a tender offer by Toyota Tsusho Co., a trading unit of Toyota Group. The TOB price is at 1,540 yen, a 44.1% premium over a 3 month average. As Toyota Tsusho limits the maximum number of shares to be purchased to 51.0% of Elematec's shares, it does not plan to delist Elematec.

PE-backed Call Center Operator To Spin Off Its Medical Division

Bellsystem 24 Co., a leading call-center operator, will spin off the CRO-related medical division into a separate company in March, according to the Nikkei. Bellsystem 24 will focus on the marketing and customer service solution business. Bellsystem 24 was acquired by Bain Capital, a US-based private equity firm, in November 2009.

Machine Tool Orders Up 17.4% In Dec.

The Japan Machine Tool Builders Association released that machine tool orders rose for the 25th straight month in December, increasing 17.4% on the year. Domestic demand was up 12.2% while foreign demand was up 19.9%. For all of 2011, they reached 1.32 trillion yen, up 35.5% from a year earlier. It is the first time in the last 3 years to top 1.3 trillion.

Asahi Kasei To Acquire VC-backed Crystal IS

Asahi Kasei Co., a chemical-based conglomerate, announced that it signed a share purchase agreement with Crystal IS, Inc., a US-based venture focused on the development of ultraviolet light emitting diodes (UV LEDs). Asahi Kasei has acquired all shares of CIS, making it a wholly owned subsidiary. CIS received venture funding in 2004 and 2006 from ARCH Venture Partners, Lux Capital, the Credit Suisse/New York State Common Retirement Fund and Harris & Harris Group.

Adecco To Acquire PE-backed Staffing Agency

Adecco Group, a global HR solution provider, announced that it has reached a share transfer agreement to acquire a 100% share of VSN Co., a manufacturing-oriented staffing agency, for about 9.1 billion yen. VSN went private in August 2010 via MBO with SBI Capital, an investment unit of the financial conglomerate formed by SBI group and Ant Global Partners, a mid-sized private equity firm.