KKR & the IPO of Kokusai Electric: Revenge is best served cold

KKR, the American private equity giant, plans to list Hitachi Kokusai Electric, the Japanese chip equipment manufacturer, on the Tokyo Stock Exchange by the end of the year. This would mark the largest IPO on the Japan Exchange since 2018.

At a time when the chip sector is booming, and the Japanese stock market is enjoying a new infatuation on the part of foreign investors, KKR is advancing an IPO on the Tokyo Stock Exchange. KKR has put forward a valuation of $2.7 billion for the company, 60% more than it paid to acquire the group in 2017, when the Hitachi conglomerate streamlined its activities. The IPO is expected to take place in the 4th quarter, a busy period for IPOs.

With 10 IPOs scheduled for this month and 9 next month, and after a powerful rally during the year, the Topix is now back in the spotlight, after a period of timidity imposed by geopolitical uncertainties and Sino-American tensions. Kokusai's listing also represents a victory for KKR, which had failed to sell the chipmaker to US-based Applied Materials in 2019, for $3.5 billion.