KKR Announces Tender Offer for Acquisition of Hitachi Transport System
TOKYO–(BUSINESS WIRE)–KKR, a leading global investment firm, today announced its intention to launch a public tender offer for the common shares of Hitachi Transport System Ltd. (“HTS” or the “Company”; TSE stock code 9086) through HTSK Co., Ltd. (the “Initiator”), an entity owned by the investment funds managed by KKR.
Hitachi Transport System is a leader in the third party logistics (“3PL”) industry in Japan. The Company provides supply chain solutions to customers who outsource logistics functions such as logistics system integration, inventory and order control, logistics center operations, factory logistics and transportation services. and delivery. HTS has a strong domestic 3PL business as well as an international business which includes forwarding and related 3PL business.
Under a recently released mid-term management plan ending in March 2025 (“LOGISTEED 2024”), the Company seeks to improve its capabilities through the integration of digital transformation, logistics technology and on-site capabilities in order to strengthen and expand its presence abroad, become a leading 3PL player in Asia, develop its “Smart Logistics” and strengthen its Environmental, Social and Governance (ESG) management practices. The company’s long-term vision (“LOGISTEED 2030”) will focus on advancing the collaboration to become a global leader in the 3PL industry. This will be achieved through high value-added solutions to optimize supply chain management, improve customer experience and efficiency through digital transformation, strengthen global value chains, engage in priority investment projects, as well as strategic mergers and acquisitions, and strengthen its position as a platform provider.
In connection with the tender offer, the Offeror has entered into an agreement (the “Agreement”) with Hitachi, Ltd. (“Hitachi”), the principal shareholder of HTS, pursuant to which, following a reverse stock split after the Offer, HTS will acquire Hitachi’s 39.91% interest in a a share buyback. Subsequently, Hitachi will reinvest by acquiring 10% of the voting shares of HTSK Holdings Co., Ltd. which holds shares of the Offeror (the “Offer’s Parent Company”) and KKR will own 90% of the voting shares of the Offeror’s Parent Company. .
The proposed tender offer price of JPY 8,913 per share and the share repurchase price of JPY 6,632 per share were determined based on negotiations between KKR, HTS and Hitachi. This transaction will be financed primarily by KKR’s Asia IV fund and is designed with a low-leverage capital structure for the sustainable growth of HTS.
The proposed offer price represents1:
A 166.22% premium to Hitachi Transport System’s 12-month average closing price as of June 16, 2021
A 161.53% premium to Hitachi Transport System’s 6-month average closing price as of June 16, 2021
KKR expects to launch the tender offer by the end of September 2022, subject to regulatory approvals in Japan and other jurisdictions. For further details regarding the terms of the tender offer, please refer to the full text of the Notice of Filing published today entitled “Notice Regarding the Commencement of the Tender Offer for Hitachi Transport System Ltd. (TSE stock code 9086)”.
Hiro Hirano, Co-Head of Asia-Pacific Private Equity at KKR and CEO of KKR Japan, said, “We are delighted to have this opportunity to invest in Hitachi Transport System, a pioneer in the Japanese 3PL market that has provided innovative logistics and supply. chain solutions for many years. We look forward to using KKR’s global network and expertise to accelerate Hitachi Transport System’s next phase of growth and help the company achieve its goal of becoming Asia’s leading 3PL company through the activation of the technology and inorganic growth in a collaborative way.
Japan continues to be a key market for KKR in Asia Pacific and globally. Since entering the Japanese market in 2006, KKR has been an active investor and has worked with leading Japanese companies on a number of landmark transactions and transformational developments across a range of asset classes including capital -investment, infrastructure, real estate and growth investments. Past investments have included Yayoi, a leading cloud accounting software provider, Seiyu, a national supermarket chain, Kokusai Electric, a leading semiconductor manufacturer, PHC, a leading medical device manufacturer, Koki Holdings, a power tools and life science equipment, Marelli, a leading automotive component supplier, Data X, a data-driven integrated marketing SaaS platform in Japan. In addition, KKR recently invested in Central Tank Terminal, Japan’s largest independent chemical storage tank operator, as an infrastructure investment and Mitsubishi Corp.-UBS Realty Inc. (MC-UBSR), one of the largest real estate asset managers in Japan, as an investment a real estate investment.
This press release has been prepared for the purpose of informing the public of the tender offer and has not been prepared for the purpose of soliciting an offer to sell or making an offer to buy securities. If shareholders wish to make an offer to sell their shares under the tender offer, they should first read the tender offer explanation statement and tender their shares or stock options. buying or selling shares at their sole discretion. This press release should not be, or constitute a part of, an offer to sell or buy, or a solicitation of an offer to sell or buy, securities, and neither this press release (or any part thereof) nor its distribution should be construed as the basis of any agreement relating to the tender offer, and this press release may not be relied upon in entering into any such agreement.
The tender offer will be conducted in accordance with disclosure procedures and standards prescribed by Japanese law, which may differ from disclosure procedures and standards in the United States. In particular, Section 13(e) and Section 14(d) of the U.S. Securities Exchange Act of 1934, as amended, and the rules prescribed therein do not apply to the tender offer. , and the tender offer does not comply with these procedures and standards.
Unless otherwise specified, all proceedings relating to the tender offer must be conducted entirely in Japanese. If all or part of a tender offer document is prepared in English and there is an inconsistency between the English and Japanese documentation, the Japanese documentation will control.
The financial advisers of the Offeror, Hitachi and HTS and the tender offer agent (including their respective affiliates) may engage before the start of or during the tender offer period in the purchase or agreement to purchase shares of the Company for their own account or for the accounts of their clients to the extent permitted by Japanese law on financial instruments and exchanges, Rule 14e-5 ( (b) the United States Stock Exchange Act of 1934, as amended, and other applicable laws and regulations. These purchases can be made at the market price through market transactions or at a price determined by negotiation outside the market. In the event that information regarding such purchases is disclosed in Japan, such information will also be disclosed on the English language homepage of the financial advisor or tender offer agent making such purchases or otherwise made public. .
KKR is a leading global investment firm providing alternative asset management solutions as well as capital markets and insurance solutions. KKR aims to generate attractive returns on investment by following a patient and disciplined investment approach, employing world-class people and supporting the growth of its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer pension, life insurance and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For more information about KKR & Co. Inc. (NYSE:KKR), please visit KKR’s website at www.kkr.com and on Twitter @KKR_Co.
1 Figures are based on Hitachi Transport System’s closing price on June 16, 2021, before speculation of the start of the bidding process and are therefore not impacted by speculation.