Bain eyed $10B Japanese IPO valuation for chipmaker Kioxia but investors saw only half the value – report
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Andranik Hakobyan
Private equity firm Bain Capital-backed Kioxia had called off IPO plans for October in Japan, after investors pushed Bain to almost halve the valuation it was seeking for the chipmaker, Reuters reported, citing people with knowledge of the matter.
In September, it was reported that Bain was in discussions with investment banks to list the Japanese company, which makes NAND flash memory. Kioxia was expected to raise about $500M, and garner a market capitalization of over 1.5T yen ($10.3B) via the IPO, which was expected in October.
The decision to halt the IPO came after global investors wanted a market value of about 800B yen for Kioxia, the report added, compared to Bain’s target of 1.5T yen.
The valuation gap complicates Bain’s efforts to exit its six-year-old investment in Kioxia. It indicates concerns investors have over the strength of the memory chip market, the report noted.
The recent sell-off in shares of Kioxia’s listed peers had made the pricing challenging, as per the previous report. Shares of Samsung Electronics (OTCPK:SSNLF), SK Hynix and Micron Technology (MU), had fallen about a third from recent highs.
Kioxia is the world’s third-largest maker of NAND flash memory and had become independent of Japanese company Toshiba in 2018 and took the new name the following year. A 56% stake in Kioxia is owned by a special-purpose company formed by Bain Capital and South Korean chipmaker SK hynix. Toshiba has a 41% stake in Kioxia, according to a previous report by Nikkei.
Bain, which led a consortium to acquire Kioxia from Toshiba for $18B in 2018, has thought about listing Kioxia in the past as well.
The Tokyo-based company was also in discussions for a transaction to integrate with Western Digital’s (WDC) memory business, intending to form an entity that could challenge NAND memory market leader Samsung.
However, discussions were called off in October 2023. SK hynix had said that it would not agree to the merger of Kioxia and Western Digital’s flash memory business due to impact on the value of the company’s investment.