MBK Partners signs first deal in Japan(3)

MBK Partners in its second deal this week has beaten two local private equity firms to seal its first deal in Japan, investing ¥71 billion in Yayoi, a business software unit of internet service provider Livedoor.

MBK Partners, a North Asia-focused buyout firm, has beaten its Japanese counterparts Advantage Partners and MKS Partners, to acquire Yayoi, a business software provider for ¥71 billion ($610.6 million; €450 million). MKS was bidding together with UK-listed private equity firm 3i, also a limited partner in the independent Japanese private equity fund.

MBK expects to complete the purchase from Livedoor, an internet service provider, on 28 September, according to a statement.

Kensuke Shizunaga, MBK Partners’ representative in Tokyo said: “In collaboration with the current management and employees we are considering a variety of measures to raise the corporate value.”

Shizunaga said MBK Partners “does not plan to directly involve itself in the company’s management”, but it will appoint two external board members.

Yayoi, acquired by livedoor, an internet startup in 2004, provides accounting software for small to medium enterprises. Livedoor was celebrated as a new corporate icon in defiance of an established corporate Japan until it fell foul of the country’s biggest corporate scandal.

Its flamboyant founder Takafumi Horie and other senior executives were convicted and fined last year for violating securities laws. Horie is appealing a prison sentence and Morgan Stanley has agreed to buy a 12.74 percent stake in Livedoor for an undisclosed price, according to a recent Bloomberg report.

MBK Partners has invested in five companies from a $1.56 billion fund it raised last year. The firm has invested in Beijing Bowei Airport Support, Taiwan’s China Netowrk Systems, Hanmi Capital and HK Mututal Savings Bank in Korea. MBK is also partnering Macquarie Bank to acquire a C&M, a Korean cable TV operator.