Bain prepared to spend $900m for advertising M&A in Asia

Bain Capital LP said it is prepared to spend about $900 million or more to acquire digital advertising companies in Asia as it revamps Japan’s No. 3 agency to better compete with rivals like Dentsu Inc.

The Boston-based private equity firm acquired 87 percent of shares in Asatsu-DK Inc., in a tender offer, the companies said in statements Thursday. Bain said it expects to delist the company by March and then build it up by acquiring firms with technology and expertise in the fast-growing digital marketing segment.

“We can provide the funding as needed,” Yuji Sugimoto, the Japan representative for Bain said in an interview in Tokyo. He said the amount it may invest in deals could be 100 billion yen ($888 million) or more.

Under the Bain takeover, Asatsu-DK is ending its 20-year partnership with the world’s largest advertising firm WPP Plc, after the two companies failed to agree on steps to compete with the likes of Dentsu and Hakuhodo DY Holdings Inc. Dentsu, Japan’s largest ad company, has acquired dozens of smaller companies around the world in the digital marketing and advertising business, including recent purchased PT Valuklik, a digital marketing company in Indonesia, and San Francisco-based Swirl Inc.

Bain, which plans to keep the current management at ADK including Chief Executive Officer Shinichi Ueno largely in place, is targeting an exit from the investment in about three years by re-listing ADK, Sugimoto said.