Buyout shops Kohlberg Kravis Roberts & Co., Olympus Capital and Advantage Partners are among those preparing bids for Japanese software developer Yayoi, Reuters reported. MBK Partners is the seller, and is looking to raise roughly 75 billion yen ($977 million) through the sale.
(Reuters) – KKR & Co LP, Olympus Capital and Advantage Partners are among firms preparing bids to buy software developer Yayoi from MBK Partners, in what could be the largest private equity deal in Japan this year, sources with direct knowledge of the matter said.
MBK is looking to raise about 75 billion yen ($977 million) through the sale of the accounting software firm, the sources said, which would beat Carlyle Group’s roughly 66 billion yen purchase of ball bearing maker Tsubaki Nakashima in March.
The yen’s recent strength means that MBK could still effectively make a profit even if Yayoi is sold for less than it hopes, the sources said. MBK bought the company in 2007 for 71 billion yen at the height of the leveraged buyout boom.
The sale could attract bidders similar to those that tried to buy Australian software firm MYOB in August. Bain Capital bought MYOB for about A$1.2 billion, beating out KKR and UK software maker Sage group .
MBK has set an Oct. 10 deadline for first-round bids and plans to complete the sale this year, said the sources, who asked not to be named because the process has not been made public.
Morgan Stanley has been hired to manage the transaction, which is mainly being handled from Hong Kong, they said.
Bain’s acquisition of MYOB valued the target around 11.3 times earnings before interest, tax, depreciation and amortisation (EBITDA), comparable to similar recent deals in the sector.
Yayoi’s EBITDA is around 5 billion yen, said the sources. That means if the company is sold at the same multiple as MYOB, it would be valued around 57 billion yen.
In 2010, KKR paid around 12.5 times EBITDA for a majority stake in accountancy software vendor Visma, while HG Capital bought Italy’s TeamSystem for 11.3 times EBITDA, UBS said in a research report. [ID: nL4E7JV169]
Officials at KKR and Asian private equity firm Olympus declined to comment, while officials at MBK and Japan’s Advantage were not immediately available. (By Junko Fujita and Stephen Aldred)