In buying Toshiba, a little-known fund takes on Japan Inc's toughest job
By Anton Bridge and Makiko Yamazaki
TOKYO (Reuters) — A little-known private equity firm is set to take on the toughest job in corporate Japan: turning around Toshiba (OTC:TOSYY).
Japan Industrial Partners (JIP) is spearheading a $14 billion takeover that will see the troubled conglomerate delisted on Wednesday after 74 years on the Tokyo exchange.
While not a global player, JIP has quietly built up a track record by carving out businesses from big manufacturers, such as Sony (NYSE:SONY)'s laptop arm and Olympus' camera unit. Led by a former banker with a Wharton MBA, it has a reputation for being hands-on with its acquisitions, and for thrift — its executives fly economy.
In Toshiba, JIP takes on a sprawling company far bigger and more complex than any it acquired before. The stakes are also higher: Toshiba employs some 106,000 people in businesses including batteries, chips, nuclear power and defence, making it critical to national security.
Whether JIP can pull off a turnaround remains an open question given the damage at Toshiba after a decade of scandal, the bankruptcy of U.S. unit Westinghouse, management upheaval and backlash from activist shareholders.
JIP, which declined to comment for this article, has said little of its plans which will see it retain current Toshiba CEO Taro Shimada. It is likely to re-list Toshiba shares within a few years, Nikkei Asia on Tuesday cited the conglomerate's outgoing chairman as saying.
Some industry insiders see a split-up and sweeping sales — rather than an initial public offering (IPO) — as the most feasible way forward.
«An IPO would be difficult without a compelling growth story that involves global expansion,» said Damian Thong, head of Japan research at Macquarie Capital
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