Japanese financial services company Orix Corp. on Thursday, Nov. 13, agreed to buy private equity-backed Japanese accounting software company Yayoi Co. Ltd. to expand its services and lure new clients.
Orix, of Tokyo, said it would pay more than ¥80 billion ($692 million) to buy Yayoi from South Korean financial investor MBK Partners LP.
"By combining ORIX's finance and service know-how with Yayoi's service and IT expertise, the two companies will seek to contribute to the growth and improved business efficiency of small businesses through the enhancement of services that are tailored to the needs of small businesses," Orix said.
MBK Partners was founded in 2005 by former Carlyle Asia Partners president Michael Kim and picked up Yayoi in a 2007 secondary buyout for $611 million in its first-ever foray into Japan. The financial investor first tried to sell Yayoi in 2011 and attracted interest from Orix as well as Kohlberg, Kravis Roberts & Co., Advantage Partners and even Olympus Corp. but was unable to exit the investment.
Yayoi was founded in 1978 and provides accounting and benefits management software, primarily for small- and medium-sized businesses. It has 1.25 million customers and is shifting its focus to cloud-based solutions that can be used from a customer's Internet browser – cloud services are also billed monthly or annually rather than one-time purchases of software packages.
The buyer said it sees significant growth potential with Yayoi since 80% of Japanese corporate activist is in the small business category.
Orix was originally a leasing company but has used dealmaking to expand into other areas and outside Japan. The company in July 2013 completed its biggest-ever acquisition, the €1.93 billion ($2.4 billion) purchase of Dutch fund manager Robeco Groep NV from Rabobank NV.
Orix will borrow ¥30 billion for the purchase, according to Reuters.
Orix shares closed 2.6%, or ¥40, higher at ¥1,630 Thursday, valuing the company at ¥2.2 trillion.