In the latest acquisition in the tools industry, U.S. private-equity fund firm KKR & Co. has agreed to buy Hitachi's power-tools unit in a deal worth about $1.3 billion.
KKR said it plans to buy all of the outstanding shares in Hitachi Koki through a tender offer starting Jan. 30
It is the second deal KKR has made in Japan in the past three months. It recently spent $4.5 billion for a 41 percent stake in Calsonic Kansei, an auto parts maker from its majority shareholder, Nissan Motor Co. Other deals KKR has made in Japan include the 2013 purchase of Panasonic Healthcare from Panasonic Corp in a deal worth $1.67 billion and the acquisition of Pioneer DJ from Pioneer Corp in 2014 for $550 million, according to Reuters.
KKR Japan chief executive Hirofumi Hirano told the Wall Street Journal that shares of Hitachi Koki have been undervalued from its being viewed as a listed unit that the parent group wouldn’t spend any money on for future investments.
“The important theme is that by spending more cash, we can help the company — which has not been a key business of a blue-chip firm — improve its corporate value,” Mr. Hirano said.
Hitachi has been aggressively unloading assets and business in the past several years, while focusing on key businesses such as infrastructure and renewable and nuclear energy, the WSJ said.
Hitachi has been making power tools for more than 50 years and has about nine manufacturing plants throughout the world.
Hitachi Power Tools carries an extensive line of professional grade tools and accessories for woodworking, metalworking, concrete drilling and cutting, as well as a complete line of pneumatic nailers, staplers, compressors and collated fasteners.