Permira buys from Olympus in first Japanese transaction

Permira is acquiring Arysta LifeScience from rival Olympus Capital in a secondary deal, valuing the agrochemical business at $2.2 billion in Japan's largest buyout this year and Permira’s first in the country.

Permira, a global buyout firm, is buying Arysta LifeScience, a Japanese agrochemical company founded in 2001, from Olympus Capital Holdings Asia, a mid-market private equity firm with offices across the region.

The enterprise value of Arysta is ¥250 billion ($2.2 billion; €1.5 billion), the largest buyout in Japan this year, according to Olympus Capital.

The deal is also Permira’s first investment in Japan since its local office opened in September 2005 and comes two weeks after an $840 million investment in Galaxy, a Chinese casino business. Permira can spend up to 30 percent of its fund outside of Europe. According to a source close to the firm, the timing of the two deals is coincidental, despite a slowdown in the firm's core European market.

Japan has proved to be a far more challenging market for buyouts than most have anticipated. The majority of international private equity firms with offices in the country concede it takes time to break into corporate Japan where many large enterprises are overdue for restructuring.

Arysta markets a portfolio of over 150 products in more than 125 countries. Olympus Capital backed Arysta in 2002  in partnership with then existing local owners Tomen and Nichimen which it subsequently bought out. Under private equity ownership, Arysta has acquired over ¥50 billion of distribution companies and product lines around the world.

Subject to regulatory review and approvals, the transaction is expected to be completed in the first quarter of 2008.