KKR seeks to take Hitachi Transport private in $5.2 billion deal

KKR & Co. unveiled a tender offer to take Hitachi Transport System Ltd. private in a deal valued at about 670 billion yen ($5.2 billion).

KKR is offering 8,913 yen for each share of Hitachi Transport on the market, a 166% premium to Hitachi Transport’s 12-month average closing price through yesterday, KKR said in a statement Thursday. The private equity firm said that it’s paying 6,632 yen a share for Hitachi’s 40% stake. 

Hitachi intends to re-invest and own around 10% of Hitachi Transport after KKR’s acquisition and the unit’s delisting, according to the statement. KKR’s goal is to make Hitachi Transport the leading third-party logistics company in Asia, Hiro Hirano, KKR Japan’s chief executive officer and KKR’s co-head of Asia Pacific private equity, said in the statement.

Blackstone Inc., Bain Capital and Baring Private Equity Asia were also seeking to buy the Hitachi Transport stake, Bloomberg News reported earlier this week.  

Once a sprawling conglomerate and the country’s biggest loss-maker, Hitachi has been divesting assets to focus on its core businesses of power grids, nuclear energy, automotive parts, train infrastructure and industrial products, linking many of them with its own software. Hitachi Construction Machinery Co., Hitachi Metals Ltd., and Hitachi Kokusai Electric Inc. are all targeted for sale, or are in the process already.

Taking Hitachi Transport private will mark another significant deal for KKR in the region. The U.S. private equity firm last week led a consortium in offering to acquire Australian hospital operator Ramsay Health Care Ltd. for about $15 billion, which could be KKR’s biggest ever buyout in Asia Pacific. 

Hitachi also announced a buyback of 200 billion yen of its own shares. The company issued an outlook at its earnings results Thursday for operating profit of 700 billion yen for the fiscal year through March 2023, compared with analyst estimates of 772 billion yen. Net sales are forecast at 9.5 trillion yen, compared with analyst predictions of 9.2 trillion yen.