Hitachi : KKR to buy Hitachi's power tools unit for $1.3 billion
January 13, 2017 at 02:25 am EST
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TOKYO (Reuters) - U.S. private equity firm KKR & Co LP (>> KKR & Co. L.P.) said on Friday it has agreed to buy Hitachi Ltd's (>> Hitachi, Ltd.) power tools unit, Hitachi Koki Co Ltd (>> Hitachi Koki Co., Ltd.), for about $1.3 billion, its second billion-dollar deal in Japan in three months.
TOKYO (Reuters) - U.S. private equity firm KKR & Co LP (>> KKR & Co. L.P.) said on Friday it has agreed to buy Hitachi Ltd's (>> Hitachi, Ltd.) power tools unit, Hitachi Koki Co Ltd (>> Hitachi Koki Co., Ltd.), for about $1.3 billion, its second billion-dollar deal in Japan in three months.
KKR will pay 1,450 yen for Hitachi Koki's stock, bringing the total deal size at 147.1 billion yen (1.05 billion pounds).
Hitachi Koki shares closed at 1,508 yen on Friday on the Tokyo Stock Exchange, valuing the company at 186 billion yen.
The deal would be KKR's second Japanese buyout since its $4.5 billion November acquisition of Calsonic Kansei Corp (>> Calsonic Kansei Corp), an autoparts maker backed by Nissan Motor Co Ltd (>> Nissan Motor Co Ltd).
KKR is taking advantage of a push by Japanese conglomerates to restructure businesses by shedding non-core operations.
The sale of Hitachi Koki to KKR would enable Hitachi to focus on its main business segments such as infrastructure.
KKR would launch a tender offer on Jan. 30. The offer price consists of 870 yen per share price for a tender offer and a special dividend of 580 yen per share.
KKR said it would buy Hitachi Koki from its $6 billion Asian Fund ll, which it completed in 2013. The buyout firm is now in the process of raising around $7 billion for its next fund, according to people familiar with the plans.
(Reporting by Junko Fujita, Chris Gallagher and Chang-Ran Kim; Editing by Christopher Cushing)
Hitachi specializes in manufacturing and marketing of electronic and industrial equipments. Net sales (including intragroup) break down by family of products and services as follows:
- social infrastructure and industrial systems (24.7%): elevators, escalators, industrial facilities, railway systems, power generation units, etc. The group also provides engineering and construction of nuclear, hydroelectric, and thermal power plants services;
- information and telecommunications products and services (20.1%): systems integration, cloud computing, software, servers, hard disks, PCs, ATMs, data communication base stations, payment terminals, etc.;
- materials and components (16.6%): semi-conductor materials, printed circuit cards, cables, copper and forged steel products, magnetic materials, organic and inorganic chemical products, etc.;
- construction equipment (10%) : hydraulic excavators, wheel loaders, mining equipment, etc.;
- automotive systems (9.4%): powertrain systems, control systems, etc.;
- electronic products (9.2%): fiber-optic components, screen tubes, testing and measurement equipment, medical equipment, equipment for manufacturing semiconductors, etc.;
- household appliances (4.7%): heating and air conditioning equipments, refrigerators, washing machines, etc.;
- other (5.3%): mainly transport, financial and logistical services.
Net sales are distributed geographically as follows: Japan (49.2%), Asia (21.3%), North America (12.7%), Europe (10.8%) and other (6%).
HITACHI, LTD. 
