Carlyle, Unison Capital Exit Part of Japanese Wafer Biz

The Carlyle Group and Unison Capital will sell part of their investment in Japan’s Covalent Materials, Reuters reported Wednesday. Taiwanese solar wafer maker Sino-American Sillicon Products Inc. is paying $451 million for the wafer unit of Covalent. Carlyle and Unison bought Covalent in 2007, paying $509 million in debt and equity, Reuters wrote.

(Reuters) – Leading private equity firms Carlyle and Unison Capital will sell part of their Japanese investment in a wafer business as they seek to return cash to their investors.

Taiwanese solar wafer maker Sino-American Sillicon Products Inc said on Wednesday it would buy the wafer unit of Japan’s Covalent Materials for $451 million to boost efficiency.

Carlyle and Unison bought Covalent from Japanese electronics giant Toshiba Corp for $509 million in debt and equity in 2007 at the peak of a leveraged buyout boom.

The agreement comes at a time when private equity firms in Japan have seen some transactions stall over prices.

Covalent’s wafer unit fits with Sino American’s attempt to fend off competition as it and other Taiwanese solar specialists face challenges from fully integrated Chinese rivals.

Covalent also makes ceramics for chip-making equipment and this business will stay with the company, which will be owned by Carlyle and Unison, the company said.

The acquisition by Sino American is subject to regulatory approval and is expected to be completed by the end of 2011.

Sino American shares ended limit-up at 6.94 percent on Wednesday before the announcement, beating the main index’s 3.25 percent gain.

Citi was the sole advisor to Sino American on the deal. (Reporting by Junko Fujita in Tokyo and Clare Jim in Taipei; Editing by Chris Lewis and Matt Driskill)