Carlyle gets into Rhythm

Washington DC-based Carlyle Group has completed the secondary buyout of Japan’s Rhythm Corporation from fellow US private equity investor JP Morgan Partners.

Rhythm Corporation, a Japanese automotive component manufacturer, has been acquired by Carlyle Group in a secondary buyout from funds managed by JP Morgan Partners and the Rhythm management team. Financial details were not disclosed, but a report in the Wall Street Journal cited sources close to the deal indicating a purchase price of around US$140 million (€105 million).

JP Morgan Partners’ funds teamed up with the Rhythm management team to acquire the business in a management buyout from Nissan Motor Corporation in August 2002.

Rhythm is a manufacturer of ball joints and other structural components supplied to major Japanese and US vehicle makers, including Nissan. In the two years since the management buyout, the firm’s annual sales have risen by more than 30 percent to 30.4 billion yen – with a large proportion of new sales coming from outside Japan.

Rhythm president and CEO Katsuo Kitamura said that during JP Morgan’s ownership, Rhythm has “successfully transitioned from a captive parts supplier, as part of the Nissan keiretsu, to a strong, independent and rapidly growing global components supplier”.

Carlyle Group closed its first Japanese buyout fund on US$470 million in January 2004, and has made a number of investments in the country since then, the largest of these being the US$2 billion buyout of wireless firm DDI Pocket in June.

JP Morgan Partners, which has a total of US$13 billion in capital under management, says it has US$1.1 billion of private equity capital dedicated to investments in Japan and the rest of Asia.