CLSA Capital Partners plans to sell Everlife in a deal that could be worth up to 70 billion yen ($840 million), Reuters reported citing sources. CLSA hired Bank of America Merrill Lynch as an adviser and to sounding out interest from other private equity firms and strategic investors, three people with direct knowledge of the matter said. CLSA Capital is Credit Agricole SA‘s private equity business. Everlife is a Fukuoka, Japan-based food supplement maker.
(Reuters) – CLSA Capital Partners, a private equity arm of Credit Agricole SA (CAGR.PA: Quote, Profile, Research, Stock Buzz), plans to sell Japanese food supplement maker Everlife in a deal that could be worth as much as 70 billion yen ($840 million), sources said.
CLSA Capital has hired Bank of America Merrill Lynch (BAC.N: Quote, Profile, Research, Stock Buzz) to advise on the sale, and is sounding out interest from other private equity firms and strategic investors, three people with direct knowledge of the matter said.
If a private equity firm agrees to buy Everlife for that price, the deal would be the largest transaction by a buyout firm in Japan this year. Last year, U.S. private equity firm Bain Capital bought Japanese telemarketer Bellsystem24 from Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) for about $1 billion.
CLSA Capital had initially planned to take Everlife public and hired Daiwa Securities Capital Markets, the investment unit of Daiwa Securities Group Inc (8601.T: Quote, Profile, Research, Stock Buzz), as an underwriter, but it cancelled the IPO plans, said the people, who spoke on condition of anonymity because the information is not public.
The value of Japan’s private equity deals has fallen by more than half this year. Private equity has conducted $1 billion worth of transactions in Japan this year, down from $2.2 billion in 2009, according to Thomson Reuters data.
The largest deal this year has been a $509 million investment by a group led by Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) in wireless phone company Emobile Ltd, Thomson Reuters data shows.
CLSA Capital Partners first invested in Fukuoka-based Everlife in 2006 and later boosted its stake to more than 90 percent, one of the people said.
A spokesman for Bank of Japan Merrill Lynch declined to comment. Officials at CLSA Capital and Everlife declined to comment.
Everlife’s flagship product is a hyaluronic acid food supplement called Kojun targeted at senior citizens.
The company’s net profit rose 83 percent to 2.76 billion yen in the year ended March 2010, according to Japanese thinktank Teikoku Data Bank. Sales rose 23 percent to 26.4 billion yen in the same period, according to Teikoku.
Everlife does not disclose financial data.
The company could be worth five to seven times its EBITDA, or earnings before interest, tax, depreciation and amortisation, which is 10 billion yen, said two other sources.
In August Daiwa Corporate Investment, a private equity unit of Daiwa Securities, and Japanese buyout firm Polaris Capital Group sold vegetable juice maker Q’sai Co to Coca-Cola West (2579.T: Quote, Profile, Research, Stock Buzz), a Coca-Cola bottler, for 63.9 billion yen.
Q’sai drew some interest from private equity firms such as Carlyle Group, UNIson Capital and CVC Capital, sources had told Reuters. [ID:nTOE67T08H]
By Junko Fujita
(Additional reporting by Wakako Sato; Editing by Chris Gallagher)