October 28, 2013

Ant Acquires A Majority In 140 Years Old Shoe Maker MoonStar

Ant Capital has acquired a majority stake in shoe manufacturer MoonStar from its founding family and from its business partners. MoonStar was established in 1873 and is one of Japan’s major shoe manufacturers. It has operations in Japan, China and Vietnam and developed its own brand. It also does contract manufacturing work for global shoe manufacturers such as K-Swiss, Burberry and Disney.

No financial details are disclosed. This is the second deal from Ant's 4th SME-focused buyout fund.

For those who are interested in cute kids shoes, please see: http://www.moonstar.co.jp/product/company.php

J Star Divests Tokachi To Mediaflag

J-Star has sold its stake in Japanese-style confectionery Tokachi to Mediaflag (TSE 6067) for an undisclosed amount. The sale was originally reported on 18 September for the execution towards the end of October. The motivation of Mediaflag, provider of sales support and mystery shopping services for consumer goods companies, to acquire a small confectionary producer and retailer is quite intriguing. From the press release,  it appears that Mediaflag is trying to apply its marketing and operational know-how to improve Tokachi's profitability and it expects the small retailer also functions as a "labo" for their marketing support and data collection activities. Tokachi, together with its 100% subsidiary Tachibana, reported the combined sales of around JPY 2.1 billion and combined losses of around JPY 50 million in the past 3 years. J-Star acquired Tokachi in August 2007 from the founder and had Tokachi acquire Tachibana in March 2008.

According to PEI, "The exit multiple, according to a source with knowledge of the deal, was 1.3x.
J-Star declined to comment."

In July, J-Star closed its second SME-focused fund with JPY 20.4 billion, of which approx. 40 % were committed by overseas investors.

Polaris's Fusen-Usagi Filed For Bankruptcy

Fusen-Usagi Corporation, apparel maker specializing in baby/kid clothing, filed for bankruptcy at Osaka Regional Court on October 15th with JPY 3 billion debt. Fusen-Usagi has been invested by Polaris Capital's 1st fund since 2006. According to Teikoku Data Bank, the kid apparel maker has been divesting real estates, closing unprofitable overseas operations and streamlining corporate structures with a substantial restructuring under Polaris. Nonetheless, sharp decline in sales finally brought the  97 year old company to bankruptcy. The 2013 sales stood at JPY 6.2 billion, less than a quarter of  JPY 26.6 billion in 2000.

Ant Capital Sells Muginoho Holdings To Nagatanien

Ant Capital has agreed to sell 100% of Muginoho Holdings, which bakes creampuffs branded “Beard Papa” and operates sweet shops and noodle shops to Nagatanien (TSE 2899) for reportedly JPY 9.44 billion.  According to PEI, it represented a return on capital of 3.3x.

Nagatanien is a very well-known household name, manufacturing processed instant food, such as instant miso-soup, "ochazuke", sushi seasoning and noodles. It has approx. JPY 69 billion in sales in FY 2013.

Nagatanien was apparently attracted by Muginoho's overseas franchise as it seeks to beef up the sales outside of Japan. Muginoho has approx. 400 shops globally, of which 200 are in 17 countries including the US, Indonesia, Vietnam, Thai, Singapore and China.

October 03, 2013

DRC Capital Sold Casa (ex-Rento Go) To Ant Capital

It was announced that DRC Capital has sold Casa, formerly called Rento Go and provider of rent guarentee that is typically needed in Japan when an individual rents a unit from the unit owner, to Ant Capital Partners.

According to the DRC press release;

Assignment of all the stake in Casa inc. held 100% by the investment funds managed by DRC Capital (Japanese Limited Partnerships DRC I and DRC II, and DRC Capital Fund, LP and DRC Investment Fund, LP) was completed on September 30 when the stake was sold to the firm's management and an investment fund managed by Ant Capital Partners Co., Ltd. DRC's involvement in Casa dates back to October 2008 when it took over the rent guarantee business carved out from Re-plus Inc. who failed for other reasons. DRC has since rebuilt the business to today's solid state with a high growth rate and profitability. The management and Ant Capital Partner's investment fund have now taken it over as a management buyout scheme.

DRC apparently acquired the rent assurance business from the failed real estate company at such a low price  that one would look for from a turnaround situation. As such, the exit ROI seems to be quite high, even though the valuation (EBITDA multiple) of today's Casa may be reasonable.

This is the first investment from Ant Capital's latest fund, Ant Catalyzer IV, which was closed last year.

DRC, on the other hand, may be starting next fund raising early next year.

October 02, 2013

Integral Acquires A Stake In Restaurant Chain TBI Group

Integral has announced that it has acquired a part of TBI Group, restaurant chain operator with 78 shops. TBI is also involved in real estate business, advertising agency business travel businessand apparel business with USD 75 mil in revenue in 2012. No transaction details were disclosed.