Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

HK Type 4 license through Ballingal Investment Advisors Ltd. ("BIA" or "BIAL")

BACKGROUND
I have 20+yrs experience in Asia doing alternative strategies (i.e. non-delta1 non long-only) in fixed income, equity derivatives, and activist/catalyst/event-driven and long-short equity strategies with most of that time spent managing money. 

4 years in fixed income macro, 8 years running internal hedge fund and 4yrs investment banking at Citi in Japan, 3 years running an Asia multi-strat portfolio at a hedge fund, 4+yrs as an independent special situations analyst.

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>Today, <a href="https://www.smartkarma.com/entities/2217" target="_blank" data-smartkarma-citation="entities:2217:1">ND Software (3794 JP)</a> announced a Management Buy Out (MBO) sponsored by both the existing president, who owns 20%, and J-Will Partners to take the company private at ¥1700/share, which is a 28.7% premium to last trade and comes out to be roughly 7.2x trailing 12-month EV/EBITDA.</p><p>The deal comes with a 66.7% minimum threshold for completion, after which there will be a two-step squeeze-out, as is the norm in deals like this.</p><p>J-Will Partners was founded about 15 years ago and has since done 170 deals for more than ¥350 billion. The fund manager specializes in "small-mid-sized companies" (which means small companies like this one) in 2nd-4th tier cities in Japan. The specialty is helping revive or grow small regional Japanese companies to better serve a larger customer base, compete with their urban and overseas rivals, and grow their local economy. For that, the deals are often funded by regional financial institutions and businesses.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/078/169/original/Screenshot%202019-02-07%20at%209.26.27%20PM.png?1549546010" class="editor-image img-responsive" data-smartkarma-image-id="78169"></figure><div style="text-align: left;" class="content-caption">data source: capitalIQ</div><h2>Terms &amp; Schedule</h2><table class="table table-striped"><tbody>
<tr><td colspan="2"><h2>Terms &amp; Schedule of J-Will Partners MBO on ND Software</h2></td></tr>
<tr>
<td>Tender Offer Price</td>
<td>JPY 1,700</td>
</tr>
<tr>
<td></td>
<td></td>
</tr>
<tr>
<td>Tender Offer Start Date</td>
<td>8 February 2019</td>
</tr>
<tr>
<td>Tender Offer Close Date</td>
<td>25 March 2019</td>
</tr>
<tr>
<td>Tender Offer Settlement Date</td>
<td>29 March 2019</td>
</tr>
<tr>
<td></td>
<td></td>
</tr>
<tr>
<td>Tender Agent</td>
<td>SMBC Securities</td>
</tr>
<tr>
<td>Maximum Shares To Buy</td>
<td>17,632,501 shares (100%)</td>
</tr>
<tr>
<td>MINIMUM Shares To Buy</td>
<td>11,755,000 shares  (66.67%)</td>
</tr>
<tr>
<td>Irrevocable Undertakings</td>
<td>5,512,800 shares (31.26%)</td>
</tr>
</tbody></table><p></p><p>With irrevocables of 31% and shareholders I would deem friendly to management holding another 20+% at a minimum, on the surface this looks like it shouldn't be overly difficult to get done...</p><p>BUT...</p>

Today, ND Software (3794 JP) announced a Management Buy Out (MBO) sponsored by both the existing president, who owns 20%, and J-Will Partners to take the company private at ¥1700/share, which is a 28.7% premium to last trade and comes out to be roughly 7.2x trailing 12-month EV/EBITDA.The deal comes with a 66.7% minimum threshold for completion, after which there will be a two-step squeeze-out, as is the norm in deals like this.J-Will Partners was founded about 15 years ago and has since done 170 deals for more than ¥350 billion. The fund manager specializes in "small-mid-sized companies" (which means small companies like this one) in 2nd-4th tier cities in Japan. The specialty is helping revive or grow small regional Japanese companies to better serve a larger customer base, compete with their urban and overseas rivals, and grow their local economy. For that, the deals are often funded by regional financial institutions and businesses.data source: capitalIQTerms &amp; Schedule
Terms &amp; Schedule of J-Will Partners MBO on ND Software

Tender Offer Price
JPY 1,700






Tender Offer Start Date
8 February 2019


Tender Offer Close Date
25 March 2019


Tender Offer Settlement Date
29 March 2019






Tender Agent
SMBC Securities


Maximum Shares To Buy
17,632,501 shares (100%)


MINIMUM Shares To Buy
11,755,000 shares  (66.67%)


Irrevocable Undertakings
5,512,800 shares (31.26%)

With irrevocables of 31% and shareholders I would deem friendly to management holding another 20+% at a minimum, on the surface this looks like it shouldn't be overly difficult to get done...BUT...

ND Software (3794 JP) TOB for an MBO - Fireworks a Possibility

Nd Software

ND Software (3794 JP) TOB for an MBO - Fireworks a Possibility