Bain, Advantage Partners share Japan deal

Bain Capital and Japanese private equity firm Advantage Partners are to acquire a payment systems provider in a transaction that marks Bain’s first in Asia since the closing of its ninth global fund.

Having recently established offices in Hong Kong, Shanghai and Tokyo, Boston-headquartered global LBO investor Bain Capital has entered into its first Asian deal, along with Japanese private equity firm Advantage Partners.

The two sponsors have agreed to acquire MEI Conlux, an unattended payment systems provider, for an undisclosed amount. They will be buying the company from Mars, the global producer of confectionery, food, pet food and beverage brands.

The deal was sourced via an auction run by Goldman Sachs on behalf of Mars. Citibank Tokyo Branch and Nikko Citigroup will be providing the financing for the transaction, according to a joint press statement from Advantage and Bain.

MEI is headquartered in Pennsylvania and Sakado, Japan. The company’s payment systems are used widely in vending, gaming, transport and retail applications, handling over 1 billion cash transactions each week, according to the statement.

“A similar approach and investment philosophy” shared by Bain Capital and Advantage Partners resulted in the teaming up of the two in the deal, David Gross-Loh, a managing director at Bain Capital in Tokyo, told PEO in an interview.

Richard Folsom, representative partner at Advantage Partners, said “a friendly, ongoing relationship” between the two firms since Advantage’s inception in 1992 set the foundation for the deal.

Advantage Partners was founded by Folsom and Taisuke Sasanuma, two former management consultants at Bain & Co. The firm manages about $1 billion in private equity funds focused on acquisitions, buyouts, buy-ins and other private equity opportunities in Japan.

Bain recently opened offices in Tokyo, Shanghai and Hong Kong to pursue private equity opportunities in Japan and China. It is still in the process of adding local talent to the teams in both countries.

Bain boasts of a track record in purchasing non-core divisions of large multinational companies, a theme favoured by private equity firms targeting North Asia, which is home to large, diversified conglomerates.

Folsom said in the press statement: “We believe MEI Conlux has significant growth potential in the key segments where it currently competes, as well as in certain new segments. We look forward to supporting the management in executing the growth strategy globally.”

Established in 1984, Bain recently closed its ninth global fund at a ceiling of $8 billion. Like Advantage, the firm was founded by former Bain & Co. management consultants who felt that their consulting and analytical skill sets could be successfully applied to private equity. Bain Capital is independent from Bain & Co.