Zinger Key Points
- KKR plans to sell about half of its 43% stake in Kokusai Electric, valuing a 20% stake at roughly $1.6 billion.
- Kokusai's shares have tripled since its IPO in October, driven by demand for chip equipment crucial to AI advancements.
KKR & Co. Inc. KKR reportedly intends to reduce its stake in Kokusai Electric, capitalizing on the strong performance of the Japanese chip equipment maker’s shares.
KKR, which currently owns about 43% of Kokusai’s shares, plans to sell approximately half of its stake to investors, reported Reuters.
Also Read: KKR Eyes $20B New North America Fund In Tough Market: Report
Kokusai will conduct a share buyback in the market. The report read that a 20% stake in Kokusai is valued at roughly $1.6 billion based on Monday’s closing price.
Kokusai exemplifies Japan’s private equity trend as conglomerates shed non-core assets and firms move to private ownership.
Kokusai, which recorded sales of 181 billion yen ($1.12 billion) in the fiscal year ending March, targets sales of over 330 billion yen and an adjusted operating margin above 30% in the medium term, the report further added.
In 2019, KKR tried to sell Kokusai to a U.S. chip competitor, but the deal fell through due to regulatory hurdles in China.
KKR stock has gained around 90% in the last 12 months. Investors can gain exposure to the stock via FM Focus Equity ETF FMCX and EA Series Trust WHITEWOLF Publicly Listed Private Equity ETF LBO.
Price Action: KKR shares closed lower by 0.95% at $105.07 on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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