Bain signs $422m Japan buyout

Private equity firm Bain Capital has agreed to acquire a tourism business of Japanese conglomerate Odaiba Ooedo Onsen Monogatari.

The Boston-based firm has bought 100 percent of the business, called Ooedo Onsen Holdings, which operates hot springs and hotels across Japan. It currently has 23 inns and six theme parks in the country, which attract around 50 million visitors per year.

The firm did not disclose financial details on the transaction, but local media has reported the deal value as close to JPY50 billion ($422 million; €372 million).

Turnover of the business has grown at a rate of 30 percent year-on-year since 2007, and Bain expects to reach JPY35 billion at the end of the current financial year. Ooedo Onsen has around 3,000 employees and has quickly expanded to become one of the leading hot spring chain-operators in Japan, according to the firm.

“Ooedo Onsen Monogatari has established an innovative model in the hot springs hospitality market that provides customers with a quality hotel service at a standard price across its network. This strategy puts the operator in a privileged position and creates greater potential for growth,” Yuji Sugimoto, managing director at Bain in Japan, commented.

The firm intends to leverage its global experience in consumer services and retail chains to implement operational changes in the business.

Sugimoto continued, “By utilising its experience and track record from operating companies such as Skylark, Bain Capital will help optimise existing teams to fulfil the inbound tourism demand in Japan. We will focus on strengthening customer marketing, and in due course, aim to speed up the opening of new Ooedo Onsen hotels in Asia and overseas.”

Bain first invested in Japan in 2006 and has since built up a strong team in its Tokyo office. The firm has now invested eight companies in the country, including Skylark, JupiterShop Channel and Domino’s Pizza Japan.