May 29, 2015

MBK Auctions Tasaki

MBK Partners is reportedly soliciting first-round bids to divest its portfolio company, Tasaki.

Tasaki is known for its pearl and generally seen as the No.2 perl jewerler after Mikimoto.

MBK Partner invested JPY 7 billion in Tasaki in the form of preferred shares in October 2008, when Global Financial crisis was erupting. However, Tasaki's profit had fallen into red a few years before the GFC and, by late 2008,  its share price was already a small fraction of its 2006 peak. Nonetheless, the share price further plunged and it took 4 years for MBK to make Tasaki marginally profitable. It was only in the last FY (ending Oct 2014) that Tasaki was able to report JPY 1.5 billion operating profit. For the first quarter of FY 2015, Tasaki reported JPY 0.7 billion net income.

According to the Bloomberg report, "The sale may fetch more than 25 billion yen ($202 million)" and "Chow Tai Fook Jewellery Group Ltd., the world’s largest listed jeweler, is among companies weighing offers."

If all the preferred shares are converted into common shares, MBK's ownership will increase from the 49% to 79%. Apparently with virtually no net debt, if the company is sold at JPY 25 billion, Tasaki deal could bring a 2.5-3x return to MBK's first fund.

May 22, 2015

CLSA Announces 2 New Investments

CLSA Capital Partners has announced 2 new investments in about a week for its Sunrise II Fund.

On may 15th, CLSA completed a share acquisition of Asamiya Co., Ltd.,  a low-cost food and beverage manufacturer based in Osaka. Asamiya was founded in 1951 and its product range includes food and beverages such as mineral and sparkling water, canned coffee, ice, soy sauce, and instant ramen noodles.  Asamiya’s consolidated sales in fiscal year ending March 2014 was approximately JPY14 billion(USD 117 million) and has approximately 600 employees. The founder family will retain some shares and continue to run the company.

Today, CLSA announced that Sunrise II has acquired a stake in Worldtool Co., Ltd.,  a wholesaler and retailer of automotive tools. Worldtool was founded in 1995 by the current CEO, who will remain at the helm of the company. Worldtool operates nearly 140 retail stores nationwide under the store name “Astro Products”. Worldtool has approximately 730 employees and its sales in fiscal year ending July 2014 were approximately JPY6 billion (USD 50 million).

Sunrise II announced its final closing in October 2014 with approx. USD 210 million commitments. It aims to build a more diversified portfolio than its predecessor Sunrise I and now has 4 portfolio companies.