TOKYO, September 28, 2017 - Bain Capital Private Equity has signed a definitive agreement with Toshiba Corporation (Toshiba) for the purchase of Toshiba Memory Corporation (TMC).
A special purpose acquisition company formed by the Bain Capital-led consortium, K.K. Pangea (Pangea) has entered into a Share Purchase Agreement (SPA) with Toshiba for the purchase of all shares of TMC, a wholly owned subsidiary of Toshiba.
Bain Capital together with Toshiba, who remains a significant investor, will control the Board and governance of the company. It will support TMC management to ensure the business and key semiconductor technology remain in Japan. Hoya, a global diversified company of innovative high-tech and med-tech products, will also invest in TMC as a common equity holder, subject to the terms and conditions in its commitment letter executed. The consortium will abide by and respect all the contractual terms of the Western Digital (WD) joint venture.
David Gross-Loh, a Managing Director of Bain Capital Private Equity, said “This is a positive outcome for both the company and the broader industry as it ensures an independent Toshiba Memory Company. The business will remain in Japan and continue to develop its leading semiconductor technology supported by significant capital investments planned by our consortium. Further, the participation of leading industry players will ensure that the semiconductor industry remains highly competitive and can respond to fast-changing demands."
Following an extensive and thorough bidding process, the Bain Capital-led consortium was selected based on several considerations, including the offer price, the ability to secure continued growth for the memory business by supporting significant capital investments, employment security for TMC’s employees, commitment to protecting key technology in Japan, the likelihood of securing competition law approvals in key jurisdictions, and certainty of completion by end of March 2018.
“Bain Capital has had a long history of building and growing leading global companies in the technology sector. We look forward to working in close partnership with management to solidify TMC’s position as a national champion and continue to innovate for the benefit of its global customers," said Stephen Pagliuca, Co-Chairman of Bain Capital. The firm has deep experience in the technology sector and has made investments in 67 companies around the world, including such leading technology and software companies as BMC Software, Symantec, Sensata Technologies, Worldpay, NXP Semiconductors, Skillsoft, MYOB, SunGard Data Systems, TeamSystem, Cerved Group SpA, LinkedIn, and SurveyMonkey. Today, Bain Capital Private Equity has a global team of 27 investment professionals dedicated to technology investing.
The Consortium includes US investors Apple, Dell Technologies Capital, Kingston Technology and Seagate. These investors have non-voting shares and will not participate in the governance or operations of the company. The consortium also includes SK Hynix. Part of SK Hynix’s investment will be in convertible bonds, which can only convert to equity with limitations and will be subject to the approval of competent antitrust authorities.
The Innovation Network Corporation of Japan (INCJ) and Development Bank of Japan Inc. (DBJ) have also expressed their intent to consider investing in Pangea or TMC at a later time, subject to the satisfaction of certain conditions.
Bain Capital Private Equity has a long history of successful investments in Japan including Skylark, Jupiter Shop Channel, BellSystem24, Domino’s Pizza Japan and Ooedo Onsen. The firm’s deep market knowledge, extensive local networks and expertise in driving operational improvement strategies have made Bain Capital a valued partner for Japanese companies. Today, Bain Capital operates a fully-fledged Japanese investment platform with 35 investment professionals based in our Tokyo office.
About Bain Capital Private Equity
Bain Capital Private Equity has partnered closely with management teams to provide the strategic resources that build great companies and help them thrive since its founding in 1984. Bain Capital Private Equity’s global team of approximately 220 investment professionals creates value for its portfolio companies through its global platform and depth of expertise in key vertical industries including healthcare, consumer/retail, financial and business services, industrials, and technology, media and telecommunications. Bain Capital has offices in Boston, Chicago, New York, Palo Alto, San Francisco, Dublin, London, Munich, Melbourne, Mumbai, Hong Kong, Shanghai, Sydney and Tokyo and has made investments in more than 300 companies to date. In addition to private equity, Bain Capital invests across asset classes including credit, public equity and venture capital, managing approximately USD 75 billion in total and leveraging the firm’s shared platform to capture opportunities in strategic areas of focus.