Brother bids for Roland DG

Brother Industries Ltd has announced its intentions to make a hostile offer to take over Roland DG though this can’t have come as a surprise to anyone involved and gives the rest of us an interesting insight into corporate acquisitions. 

This story started with the venture capital company Pacific Partners, which has a subsidiary investment fund called Taiyo Pacific Partners LP. That fund, which is based in Washington state, USA, was set up in 2001 and has been investing in Japanese companies since 2003. Taiyo Pacific Partners established a company called XYZ Corporation on 19 January 2024 specifically to approach Roland DG, making its first public overture on 9 February 2024, coincidentally the same date that Roland announced its full year results. At that point, Taiyo Pacific Partners owned 2,390,800 of Roland DG’s shares, equivalent to 19.41 percent. As of December 2023 Roland DGs total number of issued shares is 12,319,911. 

Taiyo Pacific Partners has a history with Roland, having supported a management buy out for Roland Corporation, led by its CEO Junichi Miki, in 2014. At that time, the wide format print division Roland DG was cut loose, leaving Roland Corporation to concentrate on its main business in the music industry. So it was perhaps inevitable that the venture capital company would come back for Roland DG with a similar MBO, especially given that Brian Heywood, CEO of Taiyo Pacific Partners, has been an external director of Roland DG since March 2020. 

At this point, Taiyo Pacific Partners plans to acquire the remaining shares and delist Roland DG from the Tokyo stock exchange, leaving the current management, led by Kohei Tabe, to run the company. In addition, Masahiro Tomioka who previously ran Roland DG, holds 2.65 percent of the shares, while Roland Co, Ltd has 1.03 percent of shares, and both of these have pledged to sell their shares, which altogether would give Taiyo Pacific Partners 23.12 percent of the stock. Roland DG’s board of directors has recommended this offer and the MBO that it entails. 

However, in the background, Brother had already made its intentions to acquire Roland DG known for some time and appears to have been caught by surprise by Roland’s decision to pursue an MBO with Taiyo Pacific Partners instead. 

Brother dates back to 1908 when it was founded as a sewing machine repair company, initially called Yasui Sewing Machine Co, which was changed to Nippon Sewing Machine Manufacturing Co. in January 1934, and changed again to Brother Industries Ltd in 1962.

In its press release, Brother details the history behind its bid, stating its belief that there would be a strong business affinity between the two companies. Thus Brother and Roland DG started a joint development project around December 2019 for inkjet printers. This led to Brother entering the wide format print market at last year’s Fespa show with the launch of its WF1 latex printers, which are themselves based on the chassis of Roland’s TrueVis AP640 resin printer.

Brother says that in parallel with this development the companies had discussed “measures to enhance the corporate value of both companies, including by collaboration and joint development”. This led to Brother making a written proposal on 10 February 2022, which it fleshed out to an all-out acquisition over the next few months. Brother followed this discussion up on 1 September 2023 with an offer to acquire all of Roland DG’s shares for ¥4,800 each. 

Brother also points out that it already owns technologies in both printheads and inks that Roland DG could benefit from as a subsidiary, as well as in precision machining that would help Roland’s dental business. Brother also believes that the two companies combined will be able to cut manufacturing costs, as well as streamline their sales channels.

Roland rejected this offer, citing “the possibility of dis-synergies occurring” so Brother attempted to assuage these concerns, entering into a confidentiality agreement on 23 January 2024 to share confidential information with Roland. But Roland rejected these advances on 2 February 2024. Undeterred, Brother made a second proposal on 6 February 2024, this time offering ¥4,850 per share. Brother has made clear that it was not aware of the MBO from Taiyo Pacific Partners. 

Nonetheless, Brother has now come back with a renewed offer of ¥5200 per share. Brother notes that this is ¥165 than the ¥5035 price offered by XYZ/ Taiyo Pacific Partners but accepts that XYZ or another player may come back with a higher offer. For now, Brother seems reasonably confident that its offer is high enough to stall the proposed MBO, despite being a hostile take-over, as Roland DG’s board has to consider the shareholder’s best interests. Not surprisingly, the share price has risen following Brother’s intervention, and sits at ¥5340 at time of writing.

Brother also points out that the minimum number of shares it would need to succeed is 6,159,600 shares though for now Brother only has 100 shares. Brother says that it plans on financing its offer through its own funds and borrowings from financial institutions. Brother has stated that its aim is to delist Roland DG and take over the company completely and that it would maintain the current management structure at Roland DG. 

Brother itself, which has a large consumer portfolio of garment printers and sewing machines, has published an ambitious plan to restructure its business by 2030 so that half of its sales will come from industrial products, including growth in Brother’s Domino subsidiary, as well as further growth in printing solutions based around inkjet. 

Roland DG is also attempting to transform its product mix and has developed a number of direct to object printers for personalisation of products and product decoration. Brother points out that it could help with this, and at the same time, having Roland DG in the Group would help Brother realise its own growth plans. For its part, Taiyo Pacific Partners has a good track record, having delisted Roland Corporation and helped the company to restructure before relisting on the Tokyo stock exchange at a high stock price. And of course, the MBO allows Roland DG to retain its independence. So it will be interesting to see how this plays out over the next few months.

It’s also worth noting that Roland has itself recently acquired a 50.1 percent majority of the shares of the Lithuanian company, UAB Dimense, a subsidiary of UAB Veika. The Veika company makes materials for wallpaper, with Dimense responsible for a highly textured digital wallpaper solution. Roland has been selling the Dimense printers since 2022 so it makes sense to acquire control of the company. As such, this fits Roland’s desire to expand away from its core wide format printing business. 

In any case, both Brother and Roland will be at next week’s Fespa trade show in Amsterdam. In the meantime, you can find further details from, and



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