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Bain Capital to take Japan wind company private

The US firm is planning to make its first step in Asian renewables through backing the $80m management buyout of Japan Wind Development. 

Boston-based alternatives asset manager Bain Capital Partners (Bain Capital) today announced it was planning to buy publicly-traded wind farm developer and operator Japan Wind Development (JWD), together with the company’s management.

Bain Capital’s investment in JWD, made from its $2.3 billion Asia II fund, will be the firm's first step in the renewables sector in Asia. “JWD currently holds the largest development pipeline for new wind farms in Japan, including a number of well positioned sites in areas such as Hokkaido and Tohoku. The company’s strong growth potential will further contribute to a more favorable energy mix in Japan,” said Yuji Sugimoto, managing director at Bain Capital in Japan.

Bain Capital and Masayuki Tsukawaki, JWD chief executive director, will own half of the shares each. Tsukawaki is to continue in his role as CEO.

The transaction will commence on March 24, 2015 and is expected to complete after 30 working days on May 8, 2015. The final asking price is expected to be approximately 9.7 billion yen (€74 million; $80 million).

Established in July 1999 to develop wind farms, JWD has since grown rapidly on the back of public demand for alternative energy sources following the Great East Japan Earthquake in 2011 and the related Fukushima nuclear accident.

After halting wind subsidies in 2009, the government reacted to the disaster by setting up attractive feed-in tariff schemes for renewable energies in 2012, followed by the recent renewal of a 20-year guarantee on the latest wind subsidy rate.

Wind energy currently accounts for 0.5 percent of Japan's energy mix. The government aims to bring this figure to 5.1 percent by 2030. This target, still under discussion, may be further increased to 10-15 percent.

Bain Capital first established a presence in Japan in 2006 upon opening an office in Tokyo. It now employs more than 30 professionals in the country. Its Asia II vehicle, closed in 2012, is currently 60 percent deployed.