Japan: Let's Not Make A Deal

[gkanai]

BusinessWeek on private equity in Japan.

It turns out that it's not so easy to pull off a big-ticket buyout in Corporate Japan. So far this year the flow of fresh deals has slowed -- just 39, vs. 52 a year ago, says Thomson Financial. And the value of private-equity buyouts is at $1.4 billion, vs. $2.1 billion this time last year. At that rate, the market will be hard-pressed to top the $7.5 billion rung up last year, or even the $6 billion in 2003. "All the signs are that there's too much money chasing too few deals," says C.J. Wilson, founder of Global Alliance Ltd., an M&A investment advisory firm.

Tellingly, there hasn't been a single $1 billion-plus transaction since Nikko Principal Investments Ltd. completed a protracted $2.2 billion buyout of call-center operator BellSystems24 Inc. last October. What's more, market watchers say the pipeline, for the time being, is down to a trickle. That's a problem for those 69-plus investors with money to burn.

Anyone in private equity with thoughts on this topic?

Japan: Let's Not Make A Deal [businessweek.com]

[Mulboyne]

There are any number of small deals around but everyone wants to land a knockout punch with a big ticket deal. Potential sellers know this and so pricing gets worse, just as it did in the distressed market. There is a billion dollar deal which has been sitting around for two years now but everyone was so eager to do it that the sellers expectations have become wildly unrealistic.