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Outsourcing Plans $1.3 Billion Management Buyout with Bain Capital for Strategic Restructuring

Japanese HR service firm Outsourcing, led by CEO Haruhiko Doi, intends to go private in a management buyout with Bain Capital, surpassing $1.3 billion. The move aims to enhance management efficiency after extensive mergers and acquisitions, with a premium-laden takeover bid exceeding 200 billion yen
Japan
o 2427.TSE Mid and Small Cap 2000
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Outsourcing, a Tokyo Stock Exchange-listed Japanese human resources service company, is set to undergo a transformative shift through a management buyout exceeding $1.3 billion with U.S.-based investment firm Bain Capital. The initiative, spearheaded by founder and CEO Haruhiko Doi, involves a tender offer designed to bolster Outsourcing’s management efficiency following a period of aggressive expansion through mergers and acquisitions.

As of the latest market close, Outsourcing’s shares were valued at 1,153 yen, reflecting a market capitalization of approximately 145 billion yen. The impending tender offer is expected to carry a significant premium, with the total value of shares to be acquired surpassing 200 billion yen. If approved, the buyout will result in the delisting of Outsourcing’s shares.

With a workforce dispatching over 110,000 employees, primarily in technical and service roles, to both domestic and international markets, Outsourcing serves major players in the manufacturing sector, including leading automobile and precision equipment companies. Despite its industry prominence, the company’s aggressive expansion strategy has posed challenges in managing its operations effectively.

Founded in 1997 and initially listed on the Jasdaq market in 2004, Outsourcing currently holds a position on the TSE prime market. Projections for the fiscal year ending December 31 indicate a 69% year-on-year increase in consolidated net income, reaching 18 billion yen, and a 12% surge in revenue to 770 billion yen. The company ranks third among human resource service providers in Japan, trailing Recruit Holdings and Persol Holdings. The move to go private signals a strategic realignment to navigate the evolving landscape of the human resources industry.

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