KKR closes $1.6bn Japan carve-out

Henry Kravis' firm has invested in Panasonic’s healthcare unit, which was the first agreed deal from KKR Asia Fund II.

Kohlberg Kravis Roberts has completed the agreed buyout of Panasonic Healthcare, the healthcare unit of Japanese conglomerate Panasonic, according to a statement.

Under the terms of the transaction, Panasonic retains a 20 percent interest in the business, while KKR holds the 80 percent majority stake.

KKR signed the agreement in September as its first allocation of capital from the $6 billion KKR Asia Fund II it raised last year. The firm paid JPY 165 billion (€1.24 billion; $1.67 billion) for the business, although the debt-to-equity split is unclear.

“We are pleased to have successfully completed this transaction and we look forward to working together with our new partners over the long term to support the realisation of Panasonic Healthcare’s significant growth potential,” KKR co-founder and co-chief executive, Henry Kravis, said in a statement.

“Panasonic Healthcare is a world-class company and we intend to work together to make it an even better company. Japan is a very important and attractive market for KKR, and our experienced team on the ground in Japan will leverage KKR’s global expertise and experience to make this a highly successful partnership.”

The deal is only KKR's second investment in Japan, but officials previously identified Japan and Australia as key potential markets to invest the new fund. 

“We’re seeing more potential activity today [in Japan] than we’ve ever seen,” Kravis said on a recent visit to Asia.

The firm has also strengthened its Japan team recently. In April last year it promoted Shusaku Minoda to Japan chairman, hiring Hirofumi Hirano from consulting firm AlixPartners Asia to replace him as member (equivalent to partner) and chief executive of KKR Japan.