Private equity consortium buys Japanese chipmaker FICT for $660M

MBK Partners and Formfactor have formed a consortium to acquire Japanese printed circuit board manufacturer FICT in a deal valued at $660 million.

Deal Structure and Participants: The acquisition involves MBK Partners taking an 80% stake in FICT, while Formfactor will acquire the remaining 20% from current owner Advantage Partners.

• The transaction, valued at 100 billion yen, is expected to close within the current quarter
• FICT, based in Nagano, Japan, was originally a Fujitsu subsidiary before being spun off in 2002
• The company specializes in high-end printed circuit boards for supercomputers, semiconductor testing equipment, and base stations

Strategic Rationale: The acquisition is driven by increasing demand for semiconductor products, particularly due to the growing artificial intelligence sector.

• FICT’s expertise in advanced printed circuit board manufacturing positions it well to capitalize on semiconductor industry growth
• The partnership with Formfactor, a U.S. semiconductor testing company, suggests potential technological and operational synergies
• The deal represents a significant investment in Japan’s semiconductor supply chain

Background on MBK Partners: The private equity firm, led by Korean billionaire Michael Kim, has been actively pursuing major acquisitions in Asia.

• MBK Partners currently manages assets exceeding $31 billion
• The firm has recently been involved in a high-profile attempt to gain control of Korea Zinc
• Their pursuit of Korea Zinc, in partnership with Young Poong, involved a $1.5 billion tender offer but was ultimately unsuccessful

Recent Challenges: MBK’s recent attempt to gain control of Korea Zinc highlights the firm’s ambitious expansion strategy, though not without setbacks.

• The MBK-Young Poong alliance, despite holding a 41% stake, failed to gain boardroom control of Korea Zinc
• Current Korea Zinc chairman Yun B. Choi maintained control through a strategic share purchase deal
• The consortium has announced plans to pursue legal action regarding voting rights restrictions

Industry Implications: The FICT acquisition represents a strategic move in the semiconductor industry’s ongoing evolution and consolidation.

• The deal highlights the growing importance of specialized component manufacturers in the semiconductor supply chain
• The participation of both Asian and U.S. firms in the consortium reflects the increasingly global nature of semiconductor industry partnerships
• The transaction could signal increased private equity interest in semiconductor-related assets amid growing demand from AI applications