In today’s briefing:
- [Japan M&A] ¥4,870/Sh Blackstone TOB for Technopro (6028 JP) – Watch the Parameters and Modalities
- [Japan M&A] 99Soft MBO at 52% Premium Is Too Light But A Bump May Be Tough
- TechnoPro (6028 JP): Blackstone’s Tender Offer at JPY4,870
- Recruit Holdings: 1Q Earnings Is No Surprise but More Downside Ahead
- Soft99 Corp (4464 JP): The MBO Is Light but Likely Done
- Tokyu Construction (1720 JP): Q1 FY03/26 flash update
- Nippon Denko (5563 JP): 1H FY12/25 flash update
- Daiwabo Holdings (3107 JP): Q1 FY03/26 flash update
- Chiba Kogyo Bank (8337 JP): Q1 FY03/26 flash update
- Nhk Spring (5991 JP): Q1 FY03/26 flash update
[Japan M&A] ¥4,870/Sh Blackstone TOB for Technopro (6028 JP) – Watch the Parameters and Modalities
- This was signaled in May, somewhat confirmed in July, now done. Blackstone buys Technopro at ¥4,870/share which is ~14x EV/EBITDA for next year.
- PE Firms have been scouring the Japanese market to buy companies. The METI Corporate Takeover Guidelines are super-helpful in that regard. This will squeeze the market over time.
- This takeover price is not quite as full as it could have been, and there are some parameters and modalities to this which are worth looking at. Parameters and Modalities.
[Japan M&A] 99Soft MBO at 52% Premium Is Too Light But A Bump May Be Tough
- Soft99 Corp (4464 JP) is the owner/operator of a set of ubiquitous brands in aftermarket autocare. Anything to do with washing, cleaning, etc.
- The company was founded 70 years ago, and the CEO is 54yrs old. Smells like succession planning.
- This deal is a nice premium, but it is too light. The operating assets with consistent growth and 20% OPMs are being sold at <0.9x book. That’s bad.
TechnoPro (6028 JP): Blackstone’s Tender Offer at JPY4,870
- Technopro Holdings (6028 JP) announced a tender offer from Blackstone at JPY4,870, a 43.7% premium to the undisturbed price of JPY3,389 but at a slight discount to the last close.
- While below the last close, Blackstone’s offer was a result of an auction process and was the highest binding offer. The offer also represents a pre-media rumour all-time high.
- Surprisingly, Blackstone has not disclosed irrevocables. The Board has a neutral opinion. Nevertheless, a fair auction process suggests there will be limited opposition to the offer.
Recruit Holdings: 1Q Earnings Is No Surprise but More Downside Ahead
- Recruit Holdings (6098 JP) reported 1Q results on Tuesday after market. As expected, topline declined 2.5% YoY falling below consensus. Productivity enhancements supported EBITDA growth.
- With gradual cooling of labour markets, the HR Tech segment’s top line growth has declined and Recruit does not expect the segment to see strong growth in FY03/2026E.
- Recruit’s share price dropped 4.4% during today’s trade and with further weakening of job markets, we think there is further opportunity to gain on the Short side.
Soft99 Corp (4464 JP): The MBO Is Light but Likely Done
- Soft99 Corp (4464 JP) has recommended an MBO from Mr. Hideaki Tanaka (CEO) at JPY2,465, a 52.2% premium to the last close.
- While the offer represents an all-time high, it is light as it implies a P/B of 0.93x and is below the mid-point of the IFA DCF valuation range.
- Barring the emergence of an activist, a benign shareholder register and the irrevocables suggest that this is a done deal.
Tokyu Construction (1720 JP): Q1 FY03/26 flash update
- Revenue reached JPY71.9bn, a 30.2% YoY increase, with operating profit at JPY2.2bn, reversing a prior loss.
- Parent-only revenue was JPY68.9bn, with gross profit at JPY6.8bn, driven by completed construction revenue and margins.
- Parent orders totaled JPY112.6bn, with Building Construction orders up 392.8% YoY, Civil Engineering orders down 27.7% YoY.
Nippon Denko (5563 JP): 1H FY12/25 flash update
- The company reported 1H FY12/25 revenue of JPY38.1bn (+4.4% YoY) and net income of JPY468mn (-12.4% YoY).
- A share buyback program was announced, with a maximum of 20.00mn shares and a JPY4.0bn acquisition cost cap.
- The revised FY12/25 forecast anticipates revenue of JPY78.2bn (flat YoY) and net income of JPY1.6bn (-49.1% YoY).
Daiwabo Holdings (3107 JP): Q1 FY03/26 flash update
- Revenue reached JPY290.6bn (+27.5% YoY), with IT Infrastructure Distribution at JPY286.7bn (+26.8% YoY) and Industrial Machinery at JPY3.9bn (+116.5% YoY).
- Operating profit was JPY9.9bn (+131.1% YoY), with IT Infrastructure Distribution at JPY9.5bn (+117.8% YoY) and Industrial Machinery at JPY379mn.
- Gross profit margin increased 1.1pp to 7.6%, while SG&A ratio fell 0.4pp to 4.2%, improving operating profit margin to 3.4%.
Chiba Kogyo Bank (8337 JP): Q1 FY03/26 flash update
- Consolidated ordinary income reached JPY15.8bn (+13.3% YoY), with ordinary profit at JPY3.9bn (+36.2% YoY).
- Loan balance increased to JPY2.43tn (+2.2% YoY), with deposits at JPY3.08tn (+0.2% YoY).
- Capital adequacy ratio improved to 9.30% non-consolidated, reflecting higher capital and reduced risk-weighted assets.
Nhk Spring (5991 JP): Q1 FY03/26 flash update
- Revenue increased by 3.2% YoY, while operating profit and recurring profit declined by 9.2% and 37.4% YoY, respectively.
- Automotive Seating and Automotive Suspension Spring segments posted lower revenue, while DDS and Precision Springs & Components segments recorded growth.
- Global HDD production declined YoY, but demand for high-capacity HDDs for data centers increased, boosting HDD suspensions.
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