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Advantage Partners, TPG to Bid on Hayashibara

Advantage Partners, TPG and J-Will Partners are among the suitors planning to bid on Japanese sweetener maker Hayashibara, Reuters reported. A deal for Hayashibara, which manufactures the sweetener trehalose, could reach as high as 40 billion yen ($467 million), Reuters said. Hayashibara failed earlier this year, owing 130 billion yen in debt. The first round of bidding will close April 12, and other potential bidders include Mitsubishi Corp. and Toyota Tsusho Corp.

(Reuters) – Advantage Partners, TPG and J-Will Partners are among those planning to bid for a Japanese maker of the food sweetener trehalose, a deal that could be worth as much as 40 billion yen ($467 million), three people with direct knowledge of the deal said.

The company Hayashibara, which failed in February owing 130 billion yen in debt, has been looking for an investor to keep its business going. It hired GCA Savvian Group as a financial advisor.

Trading houses such as Mitsubishi Corp and Toyota Tsusho Corp may also place bids, the people said, adding that private equity firms and strategic investors could team up.

The first round of bids will close on April 12, the people said. The date was pushed back by a week after the March 11 earthquake and tsunami rattled financial markets, they said. The people spoke on condition of anonymity as the bidding process is not public.

The bidders are attracted to Hayashibara’s dominant position in trehalose, the people said.

The company owns patents for technology to produce large amount of trehalose at low cost and for using it in various types of food and beverages.

Trehalose is used in frozen foods, beverages, beer, snacks and confectionary.

Hayashibara is based in Okayama prefecture in western Japan, an attractive location at a time when Japan’s business managers are looking for ways to diversify geographical risk, the people said.

Japan’s catastrophic March 11 earthquake and tsunami, which triggered a nuclear safety crisis and rolling power blackouts, have interrupted production at many factories in Japan, prompting calls for companies to shift their production to western Japan.

Hayashibara’s earnings before interest, tax, depreciation and amortisation (EBITDA) was about 7 billion yen in the business year ended October last year, and the company could be worth as much as six times that, the people said.

Hayashibara also owns real estate assets, which have been also put up for sale separately, the people said. Its assets include Kyoto Century Hotel, a hotel located in front of Kyoto Station. ($1 = 85.475 Japanese Yen) (Reporting by Junko Fujita; Editing by Edwina Gibbs)