Bain Capital is set to take $18B memory chip unit public

Bain Capital is set to take $18B memory chip unit public

by Marcelle Djaha

Bain Capital always claimed its investment in Toshiba Memory wouldn’t be for the long haul. But the Boston-based private equity firm could be exiting sooner than initially expected.

The firm has brought on Japanese banking giants Nomura and Mitsubishi UFJ Morgan Stanley to lead an initial public offering for Toshiba Memory that could take place in Japan as early as September, according to Reuters. The news comes about nine months after a Bain Capital-led consortium completed a 2 trillion yen deal (about $18 billion) for the embattled tech conglomerate’s memory chip unit after roughly eight months of contentious negotiations. DellApple and South Korean chipmaker SK Hynix also participated in the transaction, which included Toshiba reportedly reinvesting more than $3 billion to retain a roughly 40% stake in the business.

Bain Capital had originally pledged to take the business public within three years of its acquisition. But this would mark an especially quick exit after considerable legwork to acquire the company.

The firm originally agreed to buy the business in September 2017, beating out a consortium that included fellow chipmaker Western Digital, a Toshiba partner that initially objected before eventually settling. But Bain Capital and Toshiba still failed to close the transaction by an April 2018 deadline after the Chinese government initially objected to approve the deal over antitrust concerns. But Chinese regulators eventually gave the OK in May, perhaps in hopes of not escalating ongoing trade tensions with the US.

Bain Capital had vowed to improve operations of the memory chip division, which provides tech for smartphones and a range of other electronic devices. And last September, Toshiba Memory opened a new 500-billion-yen chipmaking plant, its first new facility in nearly two years, per the Nikkei Asian Review. But there’s been a recent decline in demand for NAND flash chips thanks to weakening smartphones sales, perhaps pushing the likes of Bain Capital and Toshiba to want to liquidate sooner rather than later.

 

 

 

 

 

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