IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/soft99-corp" target="_blank" data-smartkarma-citation="entities:18486:1" rel="noopener">Soft99 Corp (4464 JP)</a> MBO offer price has been increased by 8.7% to JPY2,680, an 18.8% discount to the last close and a 34.6% discount to the Effissimo offer. </li>
<li>Ostensibly, the offer was revised based on requests from some shareholders to increase the offer price and for it to exceed the book value of JPY2,653 (implying P/B of 1.01x). </li>
<li>The latest update points to modest withdrawals of non-KeePer acceptances. Effissimo continues to face an uphill task, and the revised MBO offer increases the odds of success.</li>
</ul>


The Soft99 Corp (4464 JP) MBO offer price has been increased by 8.7% to JPY2,680, an 18.8% discount to the last close and a 34.6% discount to the Effissimo offer. 
Ostensibly, the offer was revised based on requests from some shareholders to increase the offer price and for it to exceed the book value of JPY2,653 (implying P/B of 1.01x). 
The latest update points to modest withdrawals of non-KeePer acceptances. Effissimo continues to face an uphill task, and the revised MBO offer increases the odds of success.


Soft99 Corp (4464 JP): Could the MBO Revised Offer Get the Job Done?

Japan Specialist

Mark Chadwick

Thematic (Sector/Industry)

<ul>
<li>Sun Corp (6736 JP): A deep-value holding company trading below the value of its 44% stake in NASDAQ-listed Cellebrite; positioned as a discounted proxy on the growth of digital forensics. </li>
<li>MegaChips (6875 JP): A fabless semiconductor firm with a legacy ASIC business but a hidden asset in its ¥160 billion SiTime stake; City Index Eleven to pressure value unlock</li>
<li>KeePer (6036 JP): A high-margin car detailing business with embedded optionality through its SOFT99 stake; activist entry by Misaki Capital ensures governance pressure.</li>
</ul>


Sun Corp (6736 JP): A deep-value holding company trading below the value of its 44% stake in NASDAQ-listed Cellebrite; positioned as a discounted proxy on the growth of digital forensics. 
MegaChips (6875 JP): A fabless semiconductor firm with a legacy ASIC business but a hidden asset in its ¥160 billion SiTime stake; City Index Eleven to pressure value unlock
KeePer (6036 JP): A high-margin car detailing business with embedded optionality through its SOFT99 stake; activist entry by Misaki Capital ensures governance pressure.


Japan Activist Briefs | Sun Corp, MegaChips, KeePer

<ul>
<li>On 13 May, Bain/<a href="https://www.smartkarma.com/entities/ly-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">LY (4689 JP)</a> sent <a href="https://www.smartkarma.com/entities/kakaku-com-inc" target="_blank" data-smartkarma-citation="entities:7408:1" rel="noopener">Kakaku.com Inc (2371 JP)</a> a revised non-binding offer at JPY3,232, a 7.7% premium to EQT’s JPY3,000 offer but 4.9% below the last close.</li>
<li>While remaining non-binding, the Board will be forced to engage under its fiduciary-out clause and <a href="https://www.smartkarma.com/entities/digital-garage-inc" target="_blank" data-smartkarma-citation="entities:13747:1" rel="noopener">Digital Garage (4819 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a>’s competing-offer clauses.</li>
<li>Bain/LY’s second offer, belatedly and publicly, sets in motion an auction process. My analysis suggests that a competing bidding war could result in an offer of at least JPY3,500.</li>
</ul>


On 13 May, Bain/LY (4689 JP) sent Kakaku.com Inc (2371 JP) a revised non-binding offer at JPY3,232, a 7.7% premium to EQT’s JPY3,000 offer but 4.9% below the last close.
While remaining non-binding, the Board will be forced to engage under its fiduciary-out clause and Digital Garage (4819 JP) and KDDI Corp (9433 JP)’s competing-offer clauses.
Bain/LY’s second offer, belatedly and publicly, sets in motion an auction process. My analysis suggests that a competing bidding war could result in an offer of at least JPY3,500.


Kakaku.com (2371 JP): How High Can It Go as Bain/LY Ups the Ante?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>In <a href="https://www.smartkarma.com/insights/japan-m-a-ceo-chairman-entice-gs-to-sponsor-an-mbo-for-recently-lackluster-raksul-4384" target="_blank" data-smartkarma-citation="insights:214151" rel="noopener">[Japan M&amp;A] CEO &amp; Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384)</a> I wrote that this deal was at the wrong price, and "eminently block-able." </li>
<li>Day1 it traded a lot just above terms, then it went higher, then lower. Today it's up strongly after a Nikkei article saying Baillie Gifford is unhappy with the price.</li>
<li>That's about 14% of the register who is apparently <em>explicitly</em> unhappy with the price. It's still block-able. There will likely have to be a bump here.</li>
</ul>


In [Japan M&amp;A] CEO &amp; Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384) I wrote that this deal was at the wrong price, and "eminently block-able." 
Day1 it traded a lot just above terms, then it went higher, then lower. Today it's up strongly after a Nikkei article saying Baillie Gifford is unhappy with the price.
That's about 14% of the register who is apparently explicitly unhappy with the price. It's still block-able. There will likely have to be a bump here.


[Japan M&A/Activism] The Raksul MBO Is In Danger; Bump Clearly Needed

<ul>
<li>
<a href="https://www.smartkarma.com/entities/raksul-inc" target="_blank" data-smartkarma-citation="entities:27043:1" rel="noopener">Raksul Inc (4384 JP)</a> is a business roll-up business. They do printing, and advertising, and marketing, and supply. They want to be all things to all SMEs. </li>
<li>They are pretty good at it. Revenues and EBIT have been growing at 20-30% a year for years, and are scheduled to grow 19% and 26% for several years ahead.</li>
<li>The bid is up 40% from last, but that gets them to a 30-month high. The register is very open. Lots of active institutional shareholders who have to agree. Maybe.</li>
</ul>



Raksul Inc (4384 JP) is a business roll-up business. They do printing, and advertising, and marketing, and supply. They want to be all things to all SMEs. 
They are pretty good at it. Revenues and EBIT have been growing at 20-30% a year for years, and are scheduled to grow 19% and 26% for several years ahead.
The bid is up 40% from last, but that gets them to a 30-month high. The register is very open. Lots of active institutional shareholders who have to agree. Maybe.


[Japan M&A] CEO & Chairman Entice GS to Sponsor an MBO for Recently Lackluster Raksul (4384)

Japan

SOFT99 Corporation develops, manufactures, and markets automobile care products. The Company's products include car wash and wax products, chemical products for car maintenance and scratch repair, and house care products.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Soft99 Corp (4464 JP)