Advantage Partners acquired Hitachi High-Technologies’ Japan-headquartered die-bonder division in a closed-bid process in 2015. The business manufactures and sells die-bonding equipment for semiconductor fabrication. It is the market leader for high-performance flash memory used in both smartphones and PCs.
Immediately following the deal, Advantage embarked on a process of carving the company out from its former parent and establishing its own independent operational platform under the new name of Fasford Technology.
Advantage then set about transforming the understaffed and underinvested company by creating an independent management platform and introducing several key hires in year one. The firm also undertook a holistic review of all costs and directed fresh investment to new growth product categories so that the company could better weather the cyclical economic swings in the volatile semiconductor markets that it serves.
In addition, Advantage improved the underlying profitability of Fasford’s existing business lines by revamping the company’s pricing strategy, modifying how the company develops its software in order to enhance product quality and training the company’s sales staff to actively propose services to existing customers. The company also augmented Fasford’s basic accounting, development and planning functions.
As a result of Advantage’s interventions, as well as the overall expansion of the semiconductor market, top-line revenue growth increased by 23 percent with EBITDA more than doubling from ¥461 million at the time of the original acquisition to ¥980 million ($9 million; €8 million) at the time of exit. EBITDA margins, meanwhile, increased from 6 percent to 11 percent and Fasford’s market share grew to a dominant 78 percent.
Advantage sold the business to Fuji Technology in August 2018. Fuji is one of the largest manufacturers of industrial robots in the world, with a leading market share in the field of electric components. The acquisition of Fasford boosted its presence in semiconductor assembly as well. The company specifically referenced Fasford’s ability to quickly release new products as one of the reasons behind its decision to acquire the business. “More than anything we were happy that we were able to set Fasford up for future success by helping them create a self-sufficient platform after splitting off from Hitachi High-Technologies,” says Toru Indo, who led the investment for Advantage.
“We strongly believe that Fuji Corporation will be a great partner for Fasford going forward by helping them to develop new technologies and further enhancing the quality of manufacturing.”
Advantage’s sale of Fasford to Fuji Technology generated a gross return on investment of over 10x for the firm and an internal rate of return of close to 100 percent.
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