KKR & Co. Inc. ( KKR ) reportedly intends to reduce its stake in Kokusai Electric, capitalizing on the strong performance of the Japanese chip equipment maker’s shares.

KKR, which currently owns about 43% of Kokusai’s shares, plans to sell approximately half of its stake to investors, reported Reuters.

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Kokusai will conduct a share buyback in the market. The report read that a 20% stake in Kokusai is valued at roughly $1.6 billion based on Monday’s closing price.

Kokusai exemplifies Japan’s private equity trend as conglomerates shed non-core assets and firms move to private ownership.

Kokusai, which recorded sales of 181 billion yen ($1.12 billion) in the fiscal year ending March, targets sales of over 330 billion yen and an adjusted operating margin above 30% in the medium term, the report further added.

In 2019, KKR tried to sell Kokusai to a U.S. chip competitor, but the deal fell through due to regulatory hurdles in China.

KKR stock has gained around 90% in the last 12 months. Investors can gain exposure to the stock via FM Focus Equity ETF ( FMCX )  and EA Series Trust WHITEWOLF Publicly Listed Private Equity ETF .

Price Action: KKR shares closed lower by 0.95% at $105.07 on Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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