April 24, 2014

Baring Sells Precious Metal and Jewelry Recycler Net Japan To Orix

Baring has sold its holdings in Net Japan Co., Ltd. to Orix Corporation. Nets Japan "purchases and sells via intermediaries gold, silver, platinum, palladium, diamonds, and fine jewelry owned by individuals and sells these to refining companies, trading companies and others".  Baring acquired its stake in Net Japan in April 2012.


Hong Kong, Tokyo April 22, 2014 – Baring Private Equity Asia (“Baring Asia”) announced today that Net Japan Holdings Limited, a Hong Kong company owned by a fund advised by Baring Asia, has sold its holding in Net Japan Co., Ltd. and shares in its group companies (“Net Japan”) to Orix Corporation, the Japanese financial services group.

Established in 1995 by Mr. Toshiyuki Yoshizawa, Net Japan is a major precious metal, jewelry and diamond recycler. The company purchases and sells via intermediaries gold, silver, platinum, palladium, diamonds, and fine jewelry owned by individuals and sells these to refining companies, trading companies and others. Net Japan is headquartered in Ueno, Tokyo and trades nationwide through its network of 11 branches in Japan including Tokyo, Sapporo, Sendai, Kofu, Nagoya, Kanazawa, Osaka, Hiroshima, Fukuoka, Yokohama, and Matsuyama. Additionally, through auctions that it manages in Hong Kong, Net Japan has established overseas sales routes into China, India and other markets. It is the leading company in Japan in its field with a dominant market share.

Tadashi Maruoka, Managing Director of Baring Asia in Tokyo, said, “Net Japan is a perfect example of Baring Asia’s ability to work with entrepreneurs and management teams to assist them in growing the business, particularly outside of the domestic market. Net Japan was already an excellent business but we were able to add the financial and operational skills and other capabilities to make the business an attractive acquisition target for a suitable buyer. Net Japan will now become part of the Orix Group, a leading Japanese financial group”

Net Japan Holdings Limited first acquired its stake in Net Japan Inc. in April 2012, and embarked upon a three-pronged strategy to substantially grow the business, significantly increase profits and provide exit options for its founder. The strategy involved:

(i) preparing the business for growth: Implemented a management control infrastructure to institutionalize the business, including new compliance, financial reporting, and KPI systems

(ii) achieving growth through acquisition: Net Japan Inc. acquired its number two rival, Olympic Gold, creating an enlarged group with 60% market share, and reinforcing the management team;

(iii) driving international expansion: Net Japan Inc. acquires and aggregates jewelry, diamonds and precious metals in Japan but Net Japan Holdings Limited and its affiliates have now also built distribution businesses across Hong Kong, Bangkok, and Singapore.

April 23, 2014

J-Star Acquires 70% Of Plastic Parts Maker Kugami

J-Star announced a 70% acquisition of Kugami Co., Ltd. , a maker of plastic parts for car interiors and mobile phones. Kugami has manufacturing subsidiaries in China (Suzhou, Dalian and Tianjin) and will seek to enter Southeast Asian and Latin American markets.

April 21, 2014

J-STAR Co., Ltd. Gregory Hara President & Representative Director

Announcement of Share Acquisition of Kugami Co., Ltd.

This is to announce that our wholly managed and operated investment fund, J-STAR No. 2 Investment Limited Partnership, has established Kugami Seiki Kogyo Holdings ("KGH"). Furthermore, KGH acquired approximately 70% of the outstanding shares of Kugami Co., Ltd (headquarter: Yokohama, Kanagawa, company representative: Mr. Yasutaro Shimizu, http://www.kugami.com/index.html, "KGM") in March 2014.

KGM was founded in 1965 by the current president, Mr. Yasutaro Shimizu, as a plastic injection molder. Since its foundation, the company has engaged in plastic parts manufacturing for automobiles and electronic products. In 1993, the company opened its first trading center in Hong Kong and a facility in China (Zhuhai), making a full-scale entry into the car interior market including escutcheon panel manufacturing. Since then the company has continually scaled up its China operations, establishing branches in Suzhou in 2001, Dalian in 2003, and Tianjin in 2007. 
In Japan, the company mass-produces plastic parts in Nigata Factory and provides technical support to the Chinese facilities. Furthermore, the company acquired a factory in Yokohama from Kouritsukasei Co., Ltd, who produces plastic parts for mobile phones.

Going forward, while KGM is committed to continue strengthening its production capabilities in China, the company also plans to extend its production capabilities to South East Asia as well as Latin America. The company will reinforce the formation of the management team by adding new talents and consolidated group structure, while actively seeking for M&A & capital alliance opportunities overseas. By investing into KGM through KGH, J-STAR will support the growth strategy and the company structure to achieve the growth.

Mr. Shimizu, the founding owner, will remain as a president and continue to play a significant role in the management team. J-STAR is fully committed to support Mr.
Shimizu’s business growth strategy to become a leading player in the automobile parts manufacturing area.

In approaching this investment, we enlisted Fair Consulting Group for financial and tax-related due diligence, KMC Co., Ltd. for production technology valuation, and Baker & McKenzie (Gaikokuho Joint Enterprise) for legal due diligence. We financed a part of the acquisition capital from Tokyo Star Bank, Ltd. and Development Bank of Japan Inc.
We received financial advice from Crosspoint Advisors, Inc upon the acquisition.