Published On: Fri, Jan 13th, 2017

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

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.”

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