Goldman Eyes Japan


Goldman Sachs and SBI Holdings today announced a joint investment program, which will deploy approximately $820 million for mid-sized Japanese companies over the next three years. And it seems that Goldman might already have some targets.

According to a May 17 client research report, Goldman has identified 64 listed Japanese companies that it believes would produce five-year IRRs in excess of 20 percent. Like its earlier list of U.S.-based companies, Goldman has used a certain set of given deal assumptions. For Japan, these include 20% purchase price premiums, initial leverage at 5x EBITDA and no dividends paid to the private equity firms (unless debt is paid down in full before five years).

The best bets, according to Goldman, are: Elpida Memory (86% IRR), DyDo DRINCO (60.6%), INPEX Holdings Energy (59.1%), Shinko Electric Industries (56.5%), ACCESS (49.4%), Alpine Electronics (48.7%), Asahi Soft Drinks (47.3%), Coca-Cola West Holdings (44.2%), Leopalace21 (43.1%), NEC Electronics (42.5%) and Sega Sammy Holdings (39.8%).

Goldman also reports that private equity funds targeting Japan have “more than tripled in the past two years to around $33 billion.”

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