Bain in $1.24bn Japan buyout

The US private equity firm will acquire a 50% stake in Jupiter Shop Channel, sealing another blockbuster deal in Japan.

Bain Capital intends to acquire a 50 percent of Jupiter Shop Channel from listed Japan-based Sumitomo Corporation, according to a company statement. The firm did not disclose details of the transaction. However, media reports have said the deal was worth JPY100 billion (€990.4 million; $1.24 billion).

Jupiter Shop Channel is a TV shopping channel in Japan selling a range of items including jewellery, fitness products and household goods. The channel broadcasts 24 hours a day to an audience of 27 million homes across the nation, according to Bain.

The firm plans to use its investment to grow the business through improved customer service and product development.
Bain identified Japan’s technology market as a key sector for growth potential in the country.

David Gross-Loh, a managing director at Bain Capital said in the statement: “We believe the multi-channel strategy leveraging TV platforms, the internet and mobile technologies offers significant future growth potential in combination with ongoing efforts to further increase customer satisfaction by enhancing Shop Channel’s programming and services.”

The consumer food sector in Japan has also attracted investment from Bain. Last year, Bain completed a $2.1 billion investment in Japan-based restaurant chain Skylark, which operates restaurants Gusto and Jonathan’s. Fast-food chain Domino’s Pizza Japan is also one of Bain’s portfolio companies.

Recently, PE Asia spoke to Shintaro Hori, chairman of Bain Capital Japan, who echoed commonly expressed sentiments that the Japanese buyout market is largely proprietary and successful firms need not only local teams but a long-term presence in the country.

“It is a unique country where large companies may be available for acquisition at attractive purchase multiples with access to significant leverage and few competitors. The challenges are to build the right senior team, have capabilities to improve profits at portfolio companies and a comprehensive sourcing effort for proprietary deals.”

He continued, “Our team is a Japanese team. Everyone on the team is Japanese, with the exception of David Gross-Loh, who has spent many years in Japan and speaks Japanese. It is important to have decades of experience in Japan in a deep senior team, and we have that.”