Company

Yamato Kogyo Co. Ltd. (“Yamato”), headquartered in Himeji, Japan, is Japan's eighth-largest electric furnace steelmaker, and leading manufacturer of railway trackwork materials.

At the height of the steel import crisis in 1998, the U.S. government put pressure on the Korean government to sell Hanbo Steel Company in an effort to help restructure the steel industry and end Korea’s overcapacity problems.  Over the past several years, there were many failed attempts to sell portions of Hanbo Steel Company.  In the summer of 2002, the Korean government held an open bid auction for the sale of the steel making business of Hanbo Corp.

The sale of Hanbo Corp. was an open bid process with over 10 competitive bids.  Bidders were evaluated based on quantitative and non-quantitative factors including deal structure, acquisition price, financing feasibility, deal timing,  takeover conditions, financial validity of candidate acquirer, and management capability, among other factors.  The acquisition process and timeline that was approved by the court was very aggressive, requiring the bidder to move quickly and efficiently in executing the transaction.

Takenaka initiated the transaction, acted as the exclusive advisor to Yamato, and performed the following services:

• Drafted acquisition proposal, which resulted in Yamato winning the open bid process and being selected as the priority negotiation partner.

• Managed the due diligence investigation of Hanbo Corp.

• Evaluated and reviewed potential transaction structures, deal terms, and conditions.

• Analyzed deal pricing and valuation issues.

• Negotiated and structured the transaction, which included significant tax incentives for Yamato.

Yamato, together with its U.S. affiliate, Yamato Kogyo (U.S.A.) Corp., successfully acquired the steel making business of Hanbo Corp. for approximately 142 billion won (US $117 million).

Shobunsha Publications (“Shobunsha”) was founded in 1964, and is the largest road map publisher, and is well known for the “Mapple” brand name.  Shobunsha is also one of the largest publishers of the city guidebook. The company recently converted all map data and contents into digital format for its customers. The company is traded in the first section of Tokyo Stock Exchange.

Nihon Computer Graphic Co., Ltd. (“NCG”) was a mid-sized provider of digital mapping services and GIS solution, and delivered digital map content through the company website. NCG was established in 1983 and listed on Mothers of Tokyo Stock Exchange in 2000. Shobunsha used NCG as an outsourced service provider and owned 2.47% of NCG’s outstanding shares prior to the take over bid (“TOB”) transaction (see below for details).

The President and founder of NCG decided to sell all of the shares that he and his relatives owned in NCG to Shobunsha.  The motivating factor for the sale was to form a strategic alliance with Shobunsha in order to expand NCG’s business.  In the aggregate, the President of NCG and his family members owned approximately 45.4% of the company’s outstanding shares.  Appropriate pricing for the NCG shares was a primary factor in the deal negotiations.

Takenaka initiated the transaction, acted as the exclusive advisor to Shobunsha, and provided the following services:

• Prepared the acquisition scheme and managed the entire process.
• Conducted the financial due diligence and reviewed fundamental legal issues.
• Analyzed the mid-term management plan and assessed the value of shares from the view point of financial standing and the future plan.
• Negotiated and concluded the agreements as the buyer’s advisor.
• Managed the entire process of TOB.

Shobunsha successfully acquired 45.4% shares of NCG for approximately 180 million yen.

NEC eLuminant Technologies, Inc. (“Eluminant” or the “Company”) was the wholly-owned subsidiary of NEC USA, Inc., a wholly-owned subsidiary of NEC Corporation (“NEC Corp.”).  Eluminant was a developer and marketer of broadband access solutions, and developer of next-generation passive optical networking systems.

Eluminant was established in 1998 to build on the Company’s substantial reputation as a leading provider of "last mile" access products and solutions to major service providers in the U.S.  As a subsidiary of NEC USA, Inc., Eluminant was organized to pursue growth through strategic and financial partnerships by leveraging NEC's core technologies.  In 2002, NEC Corp. decided to sell Eluminant’s access products business as part of a worldwide restructuring plan to focus on NEC’s core business operations.

The primary concerns of the seller included the following:

• Ensuring that Eluminant’s customers continue to receive ongoing service and support from a reputable company with high standards for customer service.

• Providing employment for some percentage of Eluminant’s current employees.

• Generating a reasonable amount of consideration to Eluminant’s shareholders.

Takenaka acted as the exclusive advisor to NEC Corp. and performed the following services:

• Conducted selected due diligence investigation procedures on the preferred target buyer.
• Evaluated and reviewed potential transaction structures, deal terms, and conditions.
• Analyzed deal pricing and valuation issues.
• Assisted Eluminant in negotiating with its contract manufacturer.
• Negotiated and structured the transaction, which closed within two and a half months of the signing of the letter of intent.

Takenaka effectively negotiated the sale of Eluminant to Zhone Technologies, Inc. (“Zhone”) in a stock swap transaction.  Zhone's strategy combines existing solutions with Zhone's internally developed intellectual property to create a portfolio of scalable next-generation network products supporting a rich array of voice, data, video, and entertainment services. Zhone was founded by the senior management team that grew telecommunications pioneer Ascend Communications, Inc., from its startup roots to the multi-billion-dollar company acquired by Lucent Technologies (NYSE: LU) in September 1999.

Fujitsu Business Communications Systems, Inc. (“FBCS”) was the North American business information technology unit of Fujitsu Ltd., a leading provider of comprehensive information technology and networking solutions for the global marketplace.  FBCS designed, manufactured, sold, and serviced a wide range of world-class voice and data communications applications, including enterprise voice switching systems, voice messaging systems, contact centers, video and voice conferencing systems, network and system management tools, and broadband data communications products.

In July 2001, Fujitsu Ltd. announced its decision to implement a worldwide restructuring plan that included exiting certain markets and downsizing various overseas manufacturing sites.  As part of this restructuring, FBCS’ management was directed by its Board of Directors to develop a plan to either sell or liquidate its business operations.

Fujitsu Ltd.’s preference was to sell only the service and maintenance operations of FBCS, and to liquidate the remaining business units.  The primary objectives of the sale included the following:

• Ensuring that FBCS’ existing obligations to its customer base were met.

• Providing employment for some percentage of FBCS’ employees.

• Generating a reasonable return to Fujitsu Ltd.

Takenaka acted as the exclusive advisor to FBCS and performed the following services:

• Assisted in preparing the investment memorandum and other client presentations to potential buyers.
• Initiated contact with over 30 potential buyers, and evaluated them based on a variety of factors. 
• Managed the due diligence investigation process from the seller’s standpoint.
• Evaluated and reviewed potential transaction structures, deal terms, and conditions.
• Analyzed deal pricing and valuation issues.
• Negotiated and structured an asset sale transaction, which closed within three months of the signing of the letter of intent.

Takenaka successfully assisted Fujitsu Ltd. in completing the sale of FBCS’ service and maintenance operations to Platinum Equity Holdings (“PEH”).  PEH is a global acquisition firm specializing in the strategic operation of mission-critical businesses, including over 20 operating companies with combined revenue in excess of US$4.0 billion.

Yamato Kogyo Co. Ltd. (“Yamato”), headquartered in Himeji, Japan, is Japan's eighth-largest electric furnace steelmaker, and leading manufacturer of railway trackwork materials.

Yamato desired to accomplish two strategic objectives – to enhance its technological capabilities by acquiring specific European trackwork technology, and to increase its market share in the North American market by strengthening its distribution channels.  Initially, Yamato was interested in acquiring entities both in Europe and in the United States to accomplish these two objectives.

Through our exclusive independent research, Takenaka discovered that the European trackwork market had already consolidated, making an acquisition by Yamato cost prohibitive.  In addition, Takenaka noted that most of the industry participants in the North American market were operating at a net loss, with weakening sales.

Going beyond the traditional financial advisory role, Takenaka acted as the exclusive advisor to Yamato and performed the following services:

• Researched the European and North American trackwork markets and identified potential strategic partners.

• Initiated contact with potential partners, and visited selected European trackwork companies to initiate discussions regarding a strategic alliance.

• Recommended VAE Aktiengesellscaft (“VAE”), a leading European trackwork manufacturer, with advanced technology covering a variety of products,  as the primary strategic partner for Yamato. 

  • VAE was also interested in penetrating the Japan market. 

  • VAE’s majority-owned subsidiary located in North America, VAE Nortrak North America, Inc. (“VAENNA”), was also identified as a leading market player with strong sales channels that could potentially be used as a distribution arm for sales of Yamato’s products.

• Conducted due diligence investigation on VAE and VAENNA.

• Evaluated and reviewed potential transaction structures, deal terms, and conditions.

• Analyzed deal pricing and valuation issues.

• Negotiated and structured a transaction that involved a minority investment in VAENNA by Yamato.

With Takenaka’s assistance, Yamato entered into a global strategic alliance with VAE, and achieved North American market distribution for its trackwork products via an alliance with VAENNA.

Pokka, Inc. (“Pokka, Inc.”) was the U.S. holding company of Pokka Corporation (“Pokka Corp.”), a leading manufacturer and wholesaler of food and beverage products.  Pokka Corp. also operates over 120 Cafe de Crie coffee shops in Japan, and over 20 overseas shops and restaurants in Hong Kong, Singapore, and other Asian countries

Pokka Corp. decided to restructure its U.S. operations as part of a global restructuring plan, including Pokka, Inc. and its two wholly-owned subsidiaries, Pokka Beverages, Inc. (“Pokka Beverages”) and Sun Pokka Citrus, Inc. (“Pokka Citrus”).

Pokka Beverages’ profitability had been affected in the past due to high depreciation expense, high interest costs, poor brand awareness of the Pokka products, high sales and marketing expenses, and high volatility in the alternative beverage industry.

Takenaka acted as the exclusive advisor to Pokka Corp. and performed the following services:

• Developed a plan of reorganization that would enable the company to achieve long-term revenue growth and profitability.

• Prepared five-year proforma financial statements on a post-restructuring basis.

• Analyzed valuation issues related to the asset revaluations of Pokka Beverages and Pokka Citrus.

• The transaction structure for the reorganization plan involved the following:

  • The establishment of a new wholly-owned subsidiary corporation (“Newco”).

  • A spin-off of Pokka Citrus to Pokka Corp. in a tax-free transaction.

  • A quasi-reorganization of Pokka, Inc. and Pokka Beverages utilizing fresh-start accounting.

  • The liquidation of Pokka Beverages into Pokka, Inc. through a Section 332 transaction under the U.S. Internal Revenue Code.

  • A merger of Pokka, Inc. into Newco.

  • The termination of Pokka Beverages’ branded business.

Takenaka created an innovative reorganization plan that yielded a significant turnaround in Pokka Corp’s U.S. operations.   In the first year following the restructuring, Newco was profitable and experienced a 170% increase in year-over-year bottom-line profits.  Newco continued to increase its profitability in the years subsequent to the restructuring, and was eventually sold to The Coca-Cola Company (NYSE:KO) in December 2002.