Blackstone backs Japanese telco merger with $180m

The firm joined investors including Goldman Sachs in a $514m fundraising round for mobile data company Emobile, ahead of its merger with eAccess.

The Blackstone Group, Goldman Sachs and Japanese internet service provider eAccess invested a total of ¥45 billion (€411 million; $514 million) in Japanese mobile data and voice service provider Emobile ahead of a merger between Emobile and eAccess, the two companies said in a statement. 

Blackstone invested ¥16 billion in the deal, while Goldman Sachs and eAccess, invested ¥12 billion and ¥17 billion respectively. Specific shareholdings following the transaction were undisclosed and Blackstone declined to comment beyond the existing press release. 

According to the statement, the capital was used to strengthen Emobile’s cash flow and balance sheet ahead of its merger last week via a share exchange transaction with Tokyo Stock Exchange-listed eAccess.

eAccess established Emobile as a wholly owned subsidiary in 2005 with additional funding from Goldman Sachs and two other unnamed parties. A year later, the company’s stake was diluted when Singapore’s Temasek Holdings led a ¥27.3 billion (then $244.5 million; €189 million) capital injection into Emobile. 

According to a separate statement, eAccess held equity of 42.55 percent (equivalent to a 38.3 percent voting right) in Emobile as of September 2009.

Emobile is a provider of high speed wireless broadband solutions and has a claimed coverage of over 90 percent of Japan as of March 2009 with over 2 million subscribers to its services. 

eAccess was established in 1999 and listed on the Tokyo Stock Exchange in 2003. The company is a provider of high speed ADSL internet connections.

The two companies first announced plans for a share exchange and “strategic alliance” in December last year, in order to “boost shareholder value” through streamlining and centralising decision-making for both companies. The combined entity, known as eAccess, remains listed on the Tokyo Stock Exchange.
The Blackstone Group makes its regional investments out of six offices in Asia. The firm is currently investing out of its $21.7 billion Fund V, which closed in 2006. In April, the firm announced that it would be right-sizing the size of its latest buyout fund to $12.5 billion, down from its initial target of $20 billion. Fund VI has collected about $9.5 billion as of March this year.