Carlyle Buying Japan’s N.I.C. Corp.

Carlyle will pay 11.5 billion yen ($149 million) to buy Japan’s N.I.C. Corp., which provides medical administrative and staffing services, Reuters reported. The firm teamed up with N.I.C. management on the buyout. Carlyle, the only major private equity firm with a Japan-focused, yen-denominated investment fund, manages the 165.6 billion yen Carlyle Japan Partners II fund.

(Reuters) – Global private equity firm Carlyle said it would buy Japan’s N.I.C. Corp , which provides medical administrative and staffing services, for 11.5 billion yen ($149 million) as it targets mid-sized Japanese firms.

Carlyle, which teamed up with N.I.C.’s management in the buyout, said it would provide 7 billion yen of its own cash for the deal and borrow 5.4 billion yen from Sumitomo Mitsui Banking Corp.

The deal follows Carlyle’s purchase of ball bearing maker Tsubaki Nakashima Co for around $800 million earlier this year, which was an exceptionally large deal in a country where big companies remain reluctant to spin off non-core assets.

Carlyle, the only major private equity firm with a Japan-focused, yen-denominated investment fund, manages the 165.6 billion yen Carlyle Japan Partners II fund.

N.I.C. said it has been struggling with sluggish earnings and a weak share price, which has fallen more than 10 percent this year compared with a 2 percent drop in the Tokyo stock exchange’s service sector index .

“Our stock was not received well among investors and we did not want to cause any further trouble for our shareholders,” said Junichi Arai, CEO of Tokyo-based N.I.C.

Prior to the N.I.C. deal, 14 Japan-listed companies had become targets for management buyouts this year, already matching the number of transactions for all of last year, according to Thomson Reuters data.

The value of such transactions so far this year, at 196.2 billion yen, is almost double last year’s total.

($1 = 76.685 Japanese Yen)

(Reporting by Junko Fujita; Editing by Edmund Klamann)