Global private equity firm Carlyle will be acquiring Japan Asia Group, a Japanese company engaged in environmental solutions, and its subsidiaries in a 37 billion yen ($357.3 million) buyout deal.
The takeover bid, which aims to take Japan Asia Group private, is the first transaction by Carlyle’s $2.3 billion fourth Japan buyout fund CJP IV, raised in March this year, the private equity giant announced on November 5.
The tender price for Japan Asia Group as the holding firm is 600 yen per share, translating into a deal value of nearly 16.5 billion yen, representing a 75.44 per cent premium on the company stock’s closing price one day prior to the announcement.
A lower limit for the take-private transaction was set at 18.3 million shares.
In addition, Carlyle will acquire majority interests in two subsidiaries of Japan Asia Group for more than 20 billion yen, including 80 per cent of geospatial information technology firm Kokusai Kogyo and 70 per cent of renewable energy development company JAG International Energy Co, bringing the total consideration for the acquisitions to about 37 billion yen.
Carlyle said that the takeover will contribute to further enhancement of corporate value and sustainable growth for Japan Asia Group.
“In recent years, corporate efforts to address various social issues such as climate change and SDGs [social development goals] have become more important. Japan Asian Group will take the lead in proactively working to resolve each issue, and is expected to continue to grow in the future. Its corporate philosophy leads to long-term value and impact, and also fits Carlyle’s approach to providing sustainable solutions,” Hiroyuki Otsuka, Carlyle’s managing director and head of general industries for Japan Buyout, said in a Japanese statement.
“Japan Asia Group has aimed to become a global green community creation company through sustainable community development. Under the “new normal” brought about by the coronavirus, we will continue to pursue the solutions for social issues and improve our corporate value,” added Tetsuo Yamashita, chairman and CEO of Japan Asia Group.
The Japanese firm is also engaged in the financial services business in addition to environmental solutions, energy and social infrastructure.
The company projected to have an EBITDA of 6.76 billion yen for the 9 months of the fiscal year ending March 2021, and expected the EBITDA to increase to 10.9 billion yen and 12.8 billion in the next two fiscal years.
Carlyle’s CJP IV is its biggest Japan fund to date. The fund will focus on upper mid-market investment opportunities in Japan across consumer, retail and healthcare, general industries and TMT, as well as pursue large-cap investments on an opportunistic basis, Carlyle said in a March statement.
The $221.3 billion private equity firm has invested more than $2.7 billion in Japan including co-investments. Its portfolio in the country include precision components manufacturer Tsubaki Nakashima, healthcare service provider Solasto Corporation, savory snack producer Oyatsu, mortgage bank Aruhi Corporation, construction materials firm Senqcia Corporation and beer maker and hotel operator Orion Breweries.
