Kokusai Electric

Kokusai Electric produces chip manufacturing equipment, as well as broadcasting and television equipment. The main client of the Japanese company is South Korean Samsung Electronics (by early July 2019).

History

2023: Going public

On October 25, 2023, Kokusai Electric went public - its shares began to trade at the Tokyo site. This IPO was the largest in Japan since 2018, when SoftBank held a listing and earned 2.4 trillion yen.

According to Bloomberg, according to the results of the first day of trading, Kokusai Electric securities rose by 28% relative to the placement level and reached 2,350 yen. Moreover, during the exchange session, the company's quotations reached 2431 yen (+ 33%). Thanks to the listing, the chip manufacturer earned 108 billion yen ($720 million).

Kokusai Electric went public

According to Kumiyuki Kanai, CEO of Kokusai Electric, the successful IPO gave him confidence that the company will be able to demonstrate growing business in the future. Kanai noted that the company will continue to deal in the field of mergers and acquisitions, which will benefit the manufacturer.

Founder of research firm Lightstream Research Mio Kato, speaking to CNBC, said he was surprised by such a spike in Kokusai Electric's share price given the complexities facing the memory chip market company. The expert expected a rise of 10%.

Kokusai, owned by American investment firm KKR, set the IPO price at 1,840 yen per share. Foreign investors showed great interest in the offering, exceeding its available volume by more than 10 times. It is noted that when implementing the redistribution option for domestic investors, a total of about $833 million is expected to be raised.

By October 2023, Kokusai is a manufacturer of thin film machines on silicon wafers and has large customers such as Samsung Electronics, TSMC and Micron Technology.^[1]

2019: Applied Materials bought Kokusai Electric for $2.2 billion

On July 1, 2019, Applied Materials announced the acquisition of Kokusai Electric from private equity firm KKR & Co. for $2.2 billion. It is planned to close the deal within a year after its announcement.

After receiving approval from regulators and meeting other conditions for processing the sale of Kokusai Electric , the company will operate as a division of the Applied Materials Semiconductor Products group and will continue to be based in Japan.

According to Financial Times sources close to KKR, the completion of the deal could be delayed due to possibly protracted consideration by its authorities in China. Kokusai Electric has an extensive business in this country.

The world's largest manufacturer of chip equipment Applied Materials bought a competitor for $2.2 billion

Because the Kokusai Electric purchase is a relatively small deal, it should be approved without much trouble, but China's willingness to fight politically is always a risk, Evercore analysts said.

Applied Materials Chief Financial Officer Dan Durn said that, in addition to China, it is necessary to get a positive decision from regulators in Israel, Ireland, Japan, South Korea and Taiwan.

According to Nikkei, thanks to Kokusai Electric, Applied Materials' share in the global semiconductor equipment market will grow from 18% to 20%.

Although Applied Materials is leading the way in this market, the company is struggling due to competition that is escalating amid the expansion of Samsung and Intel's business, as well as the launch of 5G networks.^[2]

2017: KKR buys Kokusai Electric from Hitachi

KKR bought Kokusai Electric from Hitachi in 2017. The value of the transaction was not named, but before its conclusion, KKR estimated Kokusai Electric at about $3 billion.

Notes