Private equity firms KKR, Bain Capital and MBK Partners are set to submit second-rounds bids to buy Japanese auto parts maker Calsonic Kansei Corp , which has a market value of $2.4 billion, people with direct knowledge of the matter told Thomson Reuters LPC.
The buyout firms will bid for Nissan Motor Co’s 41 percent stake in Calsonic, which Japan’s second-biggest automaker is auctioning. The winner of that bid is then expected to make a public tender for the rest of Calsonic’s shares, the sources said.
Calsonic provides private equity firms a rare opportunity to do a large-sized transaction in Japan, where they have traditionally been unwelcome as domestic companies are loathe to the drastic restructuring typically undertaken by private equity acquirers.
Nissan may use the cash toward planned investments as it continues to develop new technologies including next generation electric cars and automated driving functions, while it is also planning to buy a controlling stake in embattled Mitsubishi Motors Corp.
It put up the Calsonic stake for auction and targeted buyout firms after failing to get corporate buyers interested, sources have said previously.
The first-round bids were closed in June and the second-round bids, usually the last round in auctions, are expected to close by mid-October, the sources said.
It was not immediately clear if there are other bidders for the second round or who all bid in the first round. The value of the potential bids could not be immediately ascertained. It was not known when Nissan will pick the winning bid.
The three private equity firms and Calsonic declined to comment when asked about the bids. Nissan reiterated its position that media speculation on the deal was not based on any announcement by the company, adding it would make any disclosures on the subject if necessary.
The sources asked not to be identified because they are not authorized to speak to media.
Calsonic Kansei specialises in auto parts including interiors, electronics, air conditioning units and compressors, and relies for about 80 percent of its global sales on Nissan.
But as more Japanese automakers dismantle their supplier groups, Calsonic has been trying to grow its client base away from Nissan. It now counts Renault SA – which owns 44 percent of Nissan – Isuzu Motors and other automakers as clients.
Calsonic posted a 22.5 billion yen ($220.20 million) net profit for the year ended March 2016, compared with 20.5 billion yen in the previous year. Sales rose 9 percent to 1 trillion yen in the year through March.
The sale of Nissan’s Calsonic stake is handled by Bank of America Merrill Lynch, sources have said.