Kokusai Electric, a prominent chip equipment manufacturer, has achieved a remarkable feat with Japan’s largest initial public offering (IPO) in five years, securing a substantial $724.4 million by pricing its shares at the upper end of the market range. The IPO price was set at 1,840 yen per share, placing the company’s valuation at an impressive 423.9 billion yen ($2.8 billion). This financial endeavor was made possible under the ownership of U.S. private equity firm KKR (KKR.N).
Sources with direct knowledge of the matter revealed that the portion of the IPO available to foreign investors received an overwhelming response, being oversubscribed more than tenfold. If the overallotment option for domestic investors is exercised, the offering could reach approximately $833 million.
The chip industry is navigating a dynamic landscape, balancing excitement about artificial intelligence with a market slowdown in electronics such as smartphones and personal computers. Kokusai, recognized for manufacturing machines depositing thin films on silicon wafers, adjusted its indicative pricing in response to market conditions. Initially set at 1,890 yen per share, the pricing was revised to a range of 1,830-1,840 yen per share, considering feedback from institutional investors and the prevailing stock market status.
This alteration was partly influenced by chip designer Arm’s share price performance since its recent listing, reflecting an element of caution in the market. With this IPO, KKR is set to reduce its stake from 73.2% to 47.7%, excluding any potential overallotment, marking a significant shift in the ownership structure.
Kokusai Electric holds a prestigious clientele, with industry giants such as Samsung Electronics (005930.KS), TSMC (2330.TW), and Micron Technology (MU.O) accounting for over 40% of its revenue. The shares are slated to commence trading on the Tokyo bourse’s Prime Market on October 25, signifying an important milestone for the company and the industry.
