Grainger to acquire majority ownership in Japanese MRO distributor
Chicago, IL -- W.W. Grainger, Inc., a North American broad line distributor of facilities maintenance products, pla...
Chicago, IL — W.W. Grainger, Inc., a North American broad line distributor of facilities maintenance products, plans to become a 53% majority owner of MonotaRO, a direct marketer of maintenance, repair and operating (MRO) supplies in Japan. Grainger expects to invest approximately $4 million through a tender offer bid process later this summer. (All figures in US dollars).
Established in 2000 in Osaka, MonotaRO started as a joint venture company between Grainger and Sumitomo Corporation, supplying MRO products in Japan. MonotaRO has successfully innovated in the Japanese MRO market, the second largest industrial market in the world, offering more than 110,000 products to more than 320,000 customers. In 2008, MonotaRO had revenues of $136 million and operating earnings of $11 million.
“We are excited about the opportunity to increase our ownership of MonotaRO. The Japanese MRO market is estimated at $50 billion and MonotaRO has been growing by helping thousands of small and mid-size businesses get the quality products they need to keep their facilities running,” said Grainger’s chairman, president and chief executive officer Jim Ryan.
“This increased investment, along with our recent acquisition of Asia Pacific Brands India Private Ltd., demonstrates Grainger’s commitment to grow its global presence. Our global supply chain scale and strong supplier relationships developed throughout Asia enable us to deliver what customers need. We plan to continue to pursue attractive opportunities in global markets.”
MonotaRO is traded on the Mothers market of the Tokyo Stock Exchange and is seeking to transfer its listing to the exchange’s 1st Section. In anticipation of the transfer, on June 19, 2009, MonotaRO announced it would be calling a shareholder meeting in late July to authorize the repurchase of 1.83 million shares. Assuming MonotaRO’s shareholders approve the repurchase, Grainger plans to initiate a tender offer bid in August for 380,000 shares, allowing Grainger to achieve a 53% majority interest in MonotaRO. The tender is anticipated to be completed in the third quarter.
Upon completion of MonotaRO’s repurchase of approximately 1.83 million shares, Grainger’s ownership would increase from 38% to 48%. In early August, Grainger plans to tender in Japan for 380,000 shares, approximately 5% of MonotaRO shares, at a price of 1,010 Yen per common share and has an agreement with Sumitomo Corporation which will commit 380,000 shares.
Grainger, with 2008 sales of $6.9 billion, serves businesses and institutions in the United States, Canada, Mexico, China and Panama through a network including more than 600 branches, 18 distribution centres and multiple websites.