On Thursday, chipmaking equipment company Kokusai Electric announced it would list on the Tokyo Stock Exchange on Oct. 25, potentially marking Japan’s largest IPO in five years.
At 1,890 yen per share, Kokusai will offer 111.2 billion yen ($749.88 million) in shares with a market value of 435.5 billion yen.
If demand is high, overallotment is possible. Kokusai said the offering will fund research in a growing chipmaking equipment market. The IPO will partially exit KKR.
As it reduced operations, KKR bought Hitachi’s (6501.T) electronic equipment company for 257 billion yen in 2017.
Next year, the private equity group split out Kokusai, which makes thin film deposition devices for silicon wafers.
In 2019, KKR tried to sell Kokusai to Applied Materials (AMAT.O) for $3.5 billion, but China’s regulatory approval was denied.
Over the past three years, Applied Materials has acquired 15% of the company.
A successful listing would follow SoftBank-owned chip designer Arm’s big New York IPO, which investors believed would spark a stock market boom.
With its 33-year-high stock market and ultra-low interest rates, Japan has seen strong IPO activity.
Kokusai’s preparations come amid disagreement about semiconductor industry demand, with optimism about artificial intelligence dampened by a slowdown in smartphone and PC sales.
After Reuters reported last week that major contract chipmaker TSMC (2330. TW) instructed suppliers to defer chipmaking equipment orders due to demand concerns, industry shares fell.
Kokusai’s operational profit plummeted by a fifth to 56 billion yen in the year ended March. Sales held steady at 245.7 billion yen.
Last year, KKR’s auto parts supplier, Marelli Holdings, requested a significant debt waiver, which caused losses for many big banks. A successful listing might improve its image in Japan.
