TOKYO, Sept 19 (Askume) – Japanese X-ray inspection equipment maker Rigaku, backed by buyout firm Carlyle Group (CG.O), is planning a domestic initial public offering (IPO) in October, according to two people familiar with the matter .
One source and a third source said Carlyle is targeting a market value of about 300 billion yen ($2.09 billion) for Rigaku in the IPO.
The listing is uncertain and could be cancelled or rescheduled depending on market conditions, one of the sources said.
Japan’s stock market suffered a historic drop in early August, due to a sudden rise in interest rates and concerns about a US economic slowdown, but it later recovered.
Nomura, Morgan Stanley and Bank of America are the joint global coordinators, two sources said.
Rigaku, Carlyle, Nomura, Morgan Stanley and Bank of America all declined to comment. The sources declined to be named because the information is not public.
Carlyle will sell shares in the IPO, sources said.
Subway operator Tokyo Metro could be Japan’s biggest IPO in the past six years, according to Askume, and chip maker Kioxia also plans to go public in October.
Tokyo Metro will launch its initial public offering on Friday, four sources said. Tokyo Metro declined to comment.
In the nine months to the end of September, 54 companies planned to go public, compared with 66 in the same period last year.
Some market participants expect the total number of IPOs this year to be lower than last year’s 96, as market conditions ease after August’s slowdown and more companies look to expand mergers and acquisitions (M&A).
“Stock picking conditions are still difficult,” said Soichiro Saito, head of private corporate advisory at SMBC Nikko Securities.
“However, there is considerable demand, including from foreign investors, for properly researched companies with high growth potential, so the situation is not so bleak.”
Testing Requirements
Carlyle announced in January 2021 that it would acquire approximately 80% of Rigaku’s shares through its fourth Japanese buyout fund, with the company’s then-CEO Hikaru Shimura holding approximately 20% of the shares.
Rigaku said at the time that it was targeting growing demand for X-ray equipment caused by the miniaturization of semiconductors and electronic components, and planned to bring it to market within the next few years.
The increasing complexity of wafer fabrication processes is driving the need for testing Rigaku equipment that can be used in both R&D and production.
Rigaku also sells its equipment to industries including materials science and pharmaceuticals.
Founded in 1951, Rigaku expects revenue to reach 80 billion yen by 2023, an increase of about a quarter from the same period last year, with 70% of sales coming from overseas.
Rigaku’s peers include Spectris SA (SXSL.L), Britain’s Malvern Panalytical and U.S. Bruker (BRKR.O).
Jun Kawakami, a former GE and Arteria Networks executive, became CEO last year and Shimura became chairman.
Takeovers in Japan are occurring as companies sell non-core assets, go private or lack management successors.
Carlyle’s other investments in Japan include KFC Japan, Iwasaki Electric, and Orion Brewery.
The company said in May that it had raised 430 billion yen in Japan’s biggest-ever investment vehicle .
(1 USD = 143.4800 yen)
