Acquisition of a Japanese surveying instruments manufacturer (the "Target Company") by a Japanese surveying and medical instruments manufacturer (the "Company")
Financial Advisor to the Acquirer (the "Company") from 2006 to 2008
The Company made a Tender Offer from December 2007 through January 2008 to acquire about 94% of the shareholder's voting rights of the Target Company and convert it a consolidated subsidiary of the Company.
In August 2008, the Company accomplished to make the Target Company as its wholly owned subsidiary by acquiring all the outstanding shares of common stock issued by the Target Company.
The global surveying instruments market was highly competitive and oligopolistic by the top 4 players including the Company and the Target Company as well as the two other leading manufacturers in the U.S. and Europe. Especially in Japan, total market shares of the Company and the Target Company was more than 60% in some products. In view of the circumstances, prior consultations with the Japan Fair Trade Commission (the "JFTC") were conducted in order to investigate potential impediments concerning the Antimonopoly Law.
To sort out the antimonopoly issues delineated in the process of review with the JFTC, we proposed solutions including OEM supply of some products and business transfer of sales subsidiaries to third parties. We also calculated the value of this acquisition merit reduced by such solutions.
Along with clearing the antimonopoly hurdles, we made a substantial contribution to the successful completion of the transaction by developing the structure for the Company to enjoy the benefits of this integration.
This transaction is a rare case for a Japanese domestic TOB.A typical Japanese domestic TOB is undertaken as a part of intra-group business restructuring by a parent company to raise shareholding ratio or acquire 100% ownership of its subsidiary or affiliated company. Another typical example includes an acquisition of a target company by its managers and executives in connection with MBO. In this case, however, the Company and the Target Company had no capital ties each other. It is also a significant point to be emphasized that the Company made a friendly takeover for one of its most powerful competitors, the Target Company.
With consideration of the fact that the largest shareholder of the Target Company was an investment fund, we proposed and implemented an efficient structure based on the careful review of antimonopoly issues as well as the U.S. securities regulations related to TOB.
We provided the Company with a comprehensive range of advisory services throughout all phases of TOB including financial analysis and valuation, arrangements for due diligence, documentation as well as developing strategic and tactical plans and orchestrating an overall timetable.