Sun Capital sets the seal on its exit from Japan

The turnaround specialist has sold its remaining Japanese portfolio company, dessert maker Tarami, following the closure of its Tokyo office earlier this year.

Sun Capital Partners has exited Tarami, its remaining portfolio company in Japan.

The Florida-based firm has sold its 100 percent stake in the gelatine dessert maker to Tokyo-based MUL Principle Investments Company, for between JPY7 billion ($78 million; €53 million) and JPY8 billion, according to an industry source.

The sale netted the firm gross proceeds of $49.3 million, representing a 16.4x multiple and a gross internal rate of return of 216 percent on the deal, according to a Sun Capital statement.

Tarami’s products include “Fruit Jelly” gelatine cups sold in stores under its own labels such as Kudamonoyasan and Dossari, as well as via private brands such as Dole. The company booked revenues of JPY10.1 billion for the fiscal year ended this March. Founded in 1971, Tarami is headquartered in Nagasaki.

Tarami was Sun Capital’s debut investment in the region. The firm invested $3 million in the company in April 2007, 7 months after it opened its Tokyo office.

The transaction closes the chapter on Sun Capital’s foray into Japan. The firm shuttered its Tokyo office this February, citing a decision to move away from platform opportunities in Asia. As a result of the closure, eight Tokyo-based investment professionals were retrenched.

At the time, the firm said it would still consider add-on acquisitions based in Asia for its existing portfolio companies, and could tackle such opportunities from its two offices in China – in Shenzhen and Shanghai.

This time around, Tarami is the maiden investment for MUL. The private equity arm of Mitsubishi UFJ Lease & Finance Company, a Japanese leasing and finance company, the firm was set up this March.

Presently, MUL raises capital from Mitsubishi UFJ on a deal-by-deal basis, with Mitsubishi UFJ investing between JPY3 billion and JPY5 billion per deal. The firm aims to invest approximately JPY10 billion in two to three deals each year. It may consider raising capital from third party investors in the future, the spokesman added. MUL primarily makes growth investments in mid-sized companies across all sectors in Japan.