KKR to cut stake in Japan chip tool maker Kokusai Electric, sources say

Kokusai Electric

09/07/2024 08:00

By Sam Nussey
       TOKYO, July 9 (Reuters) - Private equity firm KKR
 KKR.N  plans to cut its stake in Kokusai Electric  6525.T , two
people familiar with the matter said, cashing in after a
blistering run for shares in the Japanese chip equipment maker.
    KKR, which holds around 43% of Kokusai's shares, plans to
sell about half of its stake to investors, one of the people
said. 
    Kokusai will buy back shares in the market, the person said.
    A 20% stake in Kokusai is worth roughly $1.6 billion as at
Monday's closing price.
    KKR and Kokusai declined to comment.
    Shares in the manufacturer of deposition equipment, which
was spun out of Hitachi Kokusai Electric in 2018, have roughly
tripled since an initial public offering in October.
    Kokusai, which was originally part of Hitachi  6501.T , has
been a test case for private equity in Japan as conglomerates
shed non-core assets and companies go private.
    With chips seen as underpinning technological innovation
including the growth of artificial intelligence, Kokusai has
been buoyed by demand for shares of chip equipment makers.
    Kokusai, which reported sales of 181 billion yen ($1.12
billion) in the year ended March, has medium-term targets of 330
billion yen or more in sales and adjusted operating margin of
30% or more. 
    KKR sought to sell Kokusai to U.S. chip competitor Applied
Materials  AMAT.O  in 2019. The deal was terminated after
failing to achieve regulatory approval in China.
    Applied has a 15% stake in Kokusai.
    Kokusai also competes with Tokyo Electron  8035.T , whose
shares have risen by almost 50% in the year to date. It is
exposed to the memory sector and analysts see scope for further
expansion in logic.

($1 = 160.9400 yen)

 (Reporting by Sam Nussey; Editing by Christopher Cushing)
 ((sam.nussey@tr.com;))