Bain Capital to acquire Asatsu-DK, Japan’s third-biggest ad agency

JIJI

U.S. investment fund Bain Capital said that it will acquire Asatsu-DK Inc., the third-largest ad agency in Japan, through a tender offer.

Bain Capital plans to purchase all outstanding Asatsu-DK shares at ¥3,660 apiece and all equity warrants of the firm in the tender offer, which was to start Tuesday and end Nov. 15.

The total acquisition costs will reach up to ¥151.7 billion.

Asatsu-DK will likely be delisted from the Tokyo Stock Exchange following the completion of the acquisition procedures. Asatsu-DK stock ended at ¥3,170 on the TSE’s first section Monday.

The Japanese firm will end its capital and business alliance with London-based multinational advertising giant WPP PLC.

By coming under the wing of Bain Capital, Asatsu-DK hopes to better tackle its management challenges.

Asatsu-DK faces the need to promote ads using new technologies, such as virtual reality and big data, at a time when the advertising market in Japan has been saturated. The company also plans to beef up its content business abroad, mainly in Southeast Asia.

Asatsu-DK was established in 1999 through a merger of Asatsu Inc. and Dai-ichi Kikaku Co.

In the business year to December 2016, Asatsu-DK reported group sales of ¥353 billion, up 0.2 percent from the preceding year, and operating profit of ¥5.57 billion, up 13.6 percent. Net profit fell 55.6 percent to ¥2.38 billion.

For 2017, the company estimates group sales at ¥354.7 billion, up 0.5 percent, operating profit at ¥6.23 billion, up 11.8 percent, and net profit at ¥5.58 billion, up 134.8 percent.