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KKR postpones Hitachi Kokusai takeover
Posted on Wednesday, 09 August 2017 14:56
Private equity investor KKR has put its plans to acquire Japanese wireless communications and information systems player Hitachi Kokusai Electric on ice due to issues over the deal’s terms.
The target appointed a third party committee to assess the planned transaction and, although it originally supported the transaction, the body has now said it cannot maintain its initial opinion that the deal offer price’s legitimacy and propriety are ensured.
As a consequence of this ruling, KKR has postponed the planned takeover and said it plans to continue with discussions with Hitachi Kokusai with a view to reaching an agreement.
The tender offer period had been due to commence tomorrow (10th August), with the deal having been announced back in April.
Under the terms of the proposed transaction, KKR would have picked up stock equating to 48.3 per cent of the Tokyo-listed business for JPY 2,503 (USD 22.74) each, thereby valuing the takeover at JPY 124.23 billion.
Hitachi Kokusai was established in 1949 and employs some 4,962 people.
The company posted revenue of JPY 171.86 billion in fiscal 2016, down from JPY 180.74 billion over the preceding 12 months.
Operating income dropped 8.6 per cent from JPY 16.14 billion to JPY 14.76 billion over the same timeframe.
KKR has announced an acquisition already this week; on 8th August it signed on the dotted line to pick up Covenant Surgical Partners from DFW Capital Partners for an undisclosed consideration.
According to Zephyr, the two largest private equity deals with a Japanese target to have been announced during 2017 also involved KKR; the most valuable saw the investor pay USD 4.42 billion for Saitama-headquartered automotives player Calsonic Kansei back in May.
This was followed by the USD 1.28 billion purchase of Hitachi Koki, which was agreed in January.
Other Japanese companies to have attracted the attention of private equity firms this year include EM Devices, Tasaki & Co and From Scratch Company.
© Zephus Ltd