Bain Capital wins race for audio maker
Boston private equity firm Bain Capital will launch a $445 million bid to buy out Japan's D&M Holdings Inc., the maker of Denon audio equipment, from US buyout firm Ripplewood and the other shareholders.
RHJ International SA, which took over Japanese assets from Ripplewood, said it would sell its roughly 49 percent stake in D&M Holdings, an audio equipment firm that also owns the Marantz brand, once Bain Capital launches its takeover bid.
Bain had been competing with Japanese private equity fund Advantage Partners and other companies to buy D&M, and partnered with Japanese audio maker Kenwood Corp in the buyout, according to sources familiar with the transaction.
Kenwood spokesman Takaaki Nose said it is considering joining Bain Capital in the buyout but has not made a decision yet.
Kenwood is set to merge with electronics maker Victor Co of Japan Ltd on Oct. 1, and Nose said this was company's focus for now.
US electronics retailer Best Buy Co and Merrill Lynch Global Private Equity, the private equity investment arm of Merrill Lynch, which had also been eyeing D&M, withdrew after the first round of bidding, said the sources.
Bain Capital will bid 510 yen per share for D&M, an 8.5 percent premium over yesterday's closing price and valuing the audio maker at 48 billion yen ($445 million), D&M said in a statement on Friday.
Dutch electronics maker Philips Electronics is the second-largest shareholder in D&M with a 12 percent stake.
Bain Capital will launch the bid by July 25 and aim to acquire 100 percent of D&M, the audio maker said.
Bain Capital has secured about 70 billion yen in loans, which will be arranged by banks including Morgan Stanley, which advised D&M. The lenders also include Societe Generale, Aozora Bank Ltd, Mizuho Corporate Bank and Shinsei Bank Ltd, the sources said, asking not to be identified because the deal has not been closed.
Goldman Sachs Group Inc and Lehman Brothers Holdings Inc advised Bain Capital, D&M said.
RHJ International, which also holds stakes in Asahi Tec Corp and Columbia Music Entertainment Inc, said it would gain 15.8 billion yen from the sale of D&M.
Of the total lending, about 50 billion yen will be used for the purchase of D&M and the remainder will be spent on future acquisitions, the sources said. (Reuters)
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