Permira, Bain Capital Asia, and a partnership of CVC Asia Pacific and the Blackstone Group are reported to have made offers on Friday in the final round of bidding for Japan’s largest telemarketing company BellSystem24.
A report carried by Reuters cited seven sources as saying the private equity firms had all submitted bids for the company, which is being sold by Citigroup as part of its ongoing divestment programme to improve its balance sheet. None of the four private equity firms responded to requests for comment by the time of writing.
According to a report in Bloomberg, BellSystem24 has been valued at between $1.1 billion and $1.7 billion by Citigroup Global Markets Japan and Goldman Sachs Group, the firms advising Citigroup on the sale. The report also said Citigroup planned to select the winning bid by 13 November.
First round bids for BellSystem24 were submitted on 1 September. Global buyout firm KKR also participated in this bidding round, reportedly in conjunction with Japan’s Itochu Group, but subsequently withdrew from the competition. The deal would have been the first Japanese buyout for the firm, which opened a Tokyo office in 2006.
Permira opened its Tokyo office in July 2005 and has made one investment in the country so far: the $2.2 billion acquisition of Arysta LifeScience, an agrochemical company, in a secondary buyout from private equity firm Olympus Capital Holdings Asia in mid-2007.
CVC Asia Pacific has made several deals in Japan, where it has been investing since 2003. The firm’s Japanese portfolio companies include Mint Asia Pacific, an international network of shoe repair and key cutting outlets; Shinwa, a manufacturer of scaffolding equipment; Showa Yakuhin Kako, a maker of dental and pharmaceutical products; Skylark, the country’s largest chain of restaurants; and Tower Records Japan, the Japanese arm of the international music retailer.
In August the firm reportedly “gave up” on its 2006 investment in Skylark, handing over its stake in the company to Chuo Mitsui Capital, a private equity fund owned by Chuo Mitsui Holdings. The hand-over was said to be a trade-off for absolvence from having to repay loans taken out to finance the purchase of its stake in the company, according to a Reuters report.
Boston-headquartered Bain Capital began its Asian operations in 2006 and has a seven-strong investment team based in Tokyo. The firm has so far made three investments in the country: audio equipment company Denon & Morantz; communications equipment leasing company Sun Telephone; and payment acceptance systems developer MEI/Conlux. The latter, in which it partnered with Japanese local firm Advantage Partners in 2006, was the firm's first deal in Asia.
Blackstone opened an office in Tokyo in 2007 to focus on the firm’s real estate investment activities there. It moved managing director Alan Miyasaki from New York to head up the firm’s Japanese effort and now has a three-strong team real estate investment team on the ground.
Citigroup acquired BellSystem24 through Nikko Principal Investments Japan, one of its private equity arms, in August 2004, before successfully taking the company private in January 2005.