The Carlyle Group, a global investment firm, has launched a tender offer to acquire Seiko PMC, a Tokyo-listed paper and ink chemicals manufacturer.
The tender offer values Seiko PMC at approximately JPY 32.4bn (USD 221m) and offers a high premium of 89%. The private equity firm has already agreed to acquire 16.5m shares, which represents a 54.5% stake, from DIC Corporation, Seiko PMC’s parent company, for JPY 1,070 apiece.
The tender offer runs from September 4th to October 17th and is part of a series of transactions to acquire all of the shares in Seiko PMC, except treasury shares owned by the company.
The minimum ownership ratio that Carlyle Group needs to achieve is 12.16%, which requires a 26.7% acceptance rate.
This target is achievable, given that the offer is attractive and that corporates own a significant chunk of Seiko PMC’s shares.
This move by Carlyle Group is a strategic one, as it seeks to expand its presence in the Japanese market.
Seiko PMC’s strong market position and expertise in the paper and ink chemicals industry make it an attractive acquisition target for Carlyle Group. The tender offer also presents an opportunity for Seiko PMC shareholders to realize a significant premium on their investment.
Carlyle Group’s Tender Offer
The Carlyle Group has launched a tender offer to acquire Seiko PMC, a Tokyo-listed paper and ink chemicals manufacturer. The private equity firm has already agreed to acquire a 54.5% stake in Seiko PMC from DIC Corporation, Seiko PMC’s parent company, for JPY 1,070 apiece, which values the transaction at approximately JPY 32.4bn (USD 221m) [AVCJ]. The tender offer is for the remaining shares of Seiko PMC, and it is expected to close on October 16, 2023.
The terms and conditions of the tender offer are as follows:
- Carlyle Group will pay JPY 1,200 per share, which represents an 89% premium over the closing price on September 1, 2023 [Smartkarma].
- The aggregate purchase price for all the shares is expected to be JPY 13.2 billion yen.
- Shareholders who tender their shares by September 20, 2023, will receive an early participation payment of JPY 50 per share.
- The offer is subject to the terms and conditions set forth in the Offer to Purchase and the related Letter of Transmittal.
- The offer is set to expire at midnight, Tokyo time, on October 16, 2023.
- J.P. Morgan Securities LLC is acting as the dealer manager for the tender offer, and Georgeson LLC is acting as the information agent and depositary.
Seiko PMC Corporation
Seiko PMC Corporation is a Tokyo-listed company that specializes in producing papermaking chemicals and resin products. The company is a subsidiary of DIC Corporation, a global leader in printing ink and other materials for the printing industry. Seiko PMC is committed to contributing to a sustainable society by developing environmentally-friendly products and reducing its environmental impact.
Recently, Seiko PMC has been the subject of a tender offer by the Carlyle Group, a global private equity firm. The tender offer values Seiko PMC at approximately JPY 32.4bn (USD 221m) and offers a high premium of 89% over the current market price. The offer is expected to be successful, as DIC Corporation, which owns a 54.5% stake in Seiko PMC, has already agreed to sell its shares to the Carlyle-led group.
Seiko PMC’s expertise in papermaking chemicals and resin products makes it an attractive target for private equity firms like Carlyle. The company’s commitment to sustainability and environmentally-friendly products also aligns with the growing trend towards eco-friendly practices in the printing industry. The tender offer by Carlyle is expected to provide Seiko PMC with the resources it needs to continue developing innovative and sustainable products for the printing industry.
The Role of DIC Corporation
DIC Corporation, a Japanese chemical company, is the parent company of Seiko PMC, the target of Carlyle Group’s tender offer. DIC Corporation currently owns a 54.5% stake in Seiko PMC and has agreed to sell 16.5 million shares to Carlyle at JPY 1,070 per share. This transaction values Seiko PMC at approximately JPY 32.4 billion (USD 221 million) AVCJ.
Seiko PMC is primarily engaged in the manufacture and sale of paper and ink chemicals, as well as a range of other products including adhesives, coatings, and colorants. The company operates in Japan and internationally, with subsidiaries in China, Taiwan, and the United States.
DIC Corporation has a long history with Seiko PMC and has played a significant role in shaping the company’s operations and growth. However, DIC Corporation has determined that Carlyle Group, a global private equity firm, is an appropriate partner for Seiko PMC as it aims to transform itself into a “global company that contributes to the realization of a sustainable society through eco-friendly technology” under its long-term vision Marketscreener.
DIC Corporation’s decision to sell its stake in Seiko PMC to Carlyle Group is expected to provide Seiko PMC with the necessary capital and resources to expand its operations and pursue its long-term vision. The transaction is also expected to benefit DIC Corporation, as it will allow the company to focus on its core businesses in the printing ink and other industries Smartkarma.
In summary, DIC Corporation has played a significant role in Seiko PMC’s history, but has determined that Carlyle Group is an appropriate partner for the company’s future growth and success. The sale of its stake in Seiko PMC to Carlyle Group is expected to benefit both companies and allow them to focus on their respective core businesses.
