KKR Announces Tender Offer to Acquire Hitachi Koki Hitachi and Hitachi Urban Investment Agree to Tender Their Holdings of Hitachi Koki Shares

13-Jan-2017 Intellasia | BusinessWire | 1:33 PM Print This Post

KKR to support accelerated global growth of Hitachi Koki

TOKYO–(BUSINESS WIRE)–Leading global investment firm KKR
today announced that HK Holdings Co., Ltd. (the “Bidder”), an entity
owned by investment funds controlled by KKR, intends to make a tender
offer for all the existing common shares and stock acquisition rights of
leading power tool and life science equipment manufacturer Hitachi
Koki Co., Ltd.
(“Hitachi Koki” or the “Company”) (Code number: 6581,
First Section of the Tokyo Stock Exchange).

In connection with the tender offer, the Bidder has entered into a
tender agreement (the “Tender Agreement”) with Hitachi Ltd. (“Hitachi”),
the lead shareholder in Hitachi Koki, to acquire in the tender offer
Hitachi’s approximate 40.25% holding of Hitachi Koki’s common shares,
and also with Hitachi Urban Investment, Ltd. (“HUI”) to acquire in the
tender offer HUI’s approximate 10.90% holding of Hitachi Koki’s common
shares. The tender offer will launch subject to the fulfillment of
certain conditions in the Tender Agreement, and is expected to commence
on January 30, 2017 (for details regarding the conditions for the
commencement of the tender offer, please refer to the full text of the
press release issued today by Hitachi Koki titled “Announcement
Concerning Opinion Regarding the Tender Offer for the Shares of Hitachi
Koki Co., Ltd. by HK Holdings Co., Ltd.” and its attachment titled
“Announcement Regarding the Tender Offer for the Shares of Hitachi Koki
Co., Ltd. (Securities Code 6581)” (the “HK press release”).

Hitachi Koki is a leading supplier of high performance, high quality
power tools and life science equipment, competing in the global
marketplace to introduce cordless technology to a wider range of power
tool products and applications. The Company is actively pursuing
expansion in global markets, and has acquired German power tool company
metabo Aktiengesellschaft in March 2016. It has also formed a strategic
alliance with major North American hardware chain Lowe’s Companies, Inc.
in 2015.

Pending a successful outcome in the Bidder’s tender offer, KKR intends
to work closely with Hitachi Koki’s management and employees, leveraging
Hitachi Koki’s excellent technology development capabilities and KKR’s
global resources and the experience of its worldwide team to identify
opportunities to strengthen the Company’s business platform. These
opportunities may include implementing operational improvement
initiatives and identifying and executing acquisitions globally with the
aim of growing Hitachi Koki’s corporate value.

Under the terms of the announced offer under Japan’s Financial
Instruments and Exchange Act, among other terms, the Bidder will
commence the tender offer to acquire the issued common stock and stock
acquisition rights of Hitachi Koki. In addition, based on the Bidder’s
proposal, Hitachi Koki plans to pay a special dividend (the “Special
Dividend”) conditional upon the success of the tender offer, with a
record date of January 29, 2017. The Bidder has set a value of Hitachi
Koki common shares of JPY 1,450 per common share. Assuming the payment
of the Special Dividend of JPY 580 per common share upon the success of
the Tender Offer, the Bidder has set a tender offer price per common
share of JPY 870. The tender offer price per Hitachi Koki stock
acquisition right will be JPY 144,900. (For further details please see
the HK press release issued by Hitachi Koki today)

The value per share represents:1

  • A premium of 89.8% to Hitachi Koki’s 12-month average closing price to
    October 4, 2016
  • A premium of 108.0% to Hitachi Koki’s 6-month average closing price to
    October 4, 2016.

Since the total number of Hitachi Koki’s common shares is equal to
101,429,921 (number of issued shares excluding treasury shares;
including the number of shares subject to stock acquisition rights),
this transaction values Hitachi Koki at JPY 147.1 billion (approx.
US$1.28 billion at the exchange rate of US$1=JPY115).

Mr. Hiro Hirano, Member of KKR and CEO of KKR Japan, said, “Hitachi Koki
is a world-class manufacturer of power tools and a developer of
innovative tool technologies. The Company is well-positioned for further
organic and inorganic growth given the high quality of its products, its
high-caliber team and the attractive environment for power tools through
cordless and digital trends. Looking ahead, we are fully committed to
leveraging our global network and resources to provide full support to
Hitachi Koki in pursuing its growth strategy.”

KKR makes its proposed investment predominantly from its Asian Fund II.
KKR has been investing in Japan through its pan-regional private equity
funds since 2010. Japan has been and continues to be a key focus for KKR
in the region. To date, KKR has completed three acquisitions in the
market: Intelligence Ltd., a leading human resources services company;
Panasonic Healthcare, the carve-out health care business of Panasonic
Corporation; and Pioneer DJ, the carve-out DJ equipment business of
Pioneer Corporation. In addition, on November 22, 2016 KKR announced the
launch of a tender offer for Calsonic Kansei.

This press release should be read in conjunction with the full text of
the HK press release, which is available on www.jpx.co.jp.

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 purchase, any
If shareholders wish to make an offer to sell their
shares in the tender offer, they should first read the Tender Offer
Explanation Statement for the tender offer and offer their shares or
stock options for sale at their own discretion.
This press
release shall neither be, nor constitute a part of, an offer to sell or
purchase, or a solicitation of an offer to sell or purchase, any
securities, and neither this press release (or a part thereof) nor its
distribution shall be interpreted to be the basis of any agreement in
relation to the tender offer, and this press release may not be relied
on at the time of entering into any such agreement.

The tender offer will be conducted for common shares and stock
acquisition rights of Hitachi Koki, a company established in Japan. The
tender offer will be conducted in accordance with the procedures and
information disclosure standards prescribed by Japanese law, which may
differ from the procedures and information disclosure standards in the
United States.
In particular, Section 13(e) and Section 14(d) of
the U.S. Securities Exchange Act of 1934 and the rules prescribed
thereunder do not apply to the tender offer, and the tender offer does
not conform to those procedures and standards.

Unless otherwise specified, all procedures relating to the tender
offer are to be conducted entirely in Japanese.
If all or any
part of a document relating to the tender offer is prepared in the
English language and there is any inconsistency between the
English-language documentation and the Japanese-language documentation,
the Japanese-language documentation will prevail.

The financial advisors to the Bidder and the Company as well as the
tender offer agent may engage in the purchase of shares of the Company
for their own account or for their customers’ accounts to the extent
permitted under the Japanese Financial Instruments and Exchange Act, and
the Bidder acknowledges such purchases.
In the event information
regarding such purchases is disclosed in Japan, such information will
also be disclosed in English on the website of Hitachi Koki or the
financial advisor conducting such purchases or the website of the tender
offer agent, or will otherwise be made publicly available.

About KKR

KKR is a leading global investment firm that manages investments across
multiple asset classes including private equity, energy, infrastructure,
real estate, credit and hedge funds. KKR aims to generate attractive
investment returns by following a patient and disciplined investment
approach, employing world‐class people, and driving growth and value
creation at the asset level. KKR invests its own capital alongside its
partners’ capital and brings opportunities to others through its capital
markets business. References to KKR’s investments may include the
activities of its sponsored funds. For additional information about KKR
& Co. L.P. (NYSE:KKR), please visit KKR’s website at www.kkr.com and
on Twitter @KKR_Co.

1 The figures set out above are based on the Hitachi Koki
closing share prices extracted from Bloomberg as at and prior to the
last full trading day (October 4, 2016) immediately prior to the day of
publication of speculative media reports regarding the tender offer (the
‘unaffected price’).


KKR Asia Pacific
Anita Davis, +852-3692-7335
[email protected]
New York
Kristi Huller, +1 212-230-9722
[email protected]
KKR Japan

Ashton Consulting
John Sunley, +81-3-5425-7220
[email protected]
Jennings, +81-3-5425-7220
[email protected]


Category: BusinessWire, PRAsia

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