KKR acquires 35% stake in Japanese software maker Fuji Soft, potentially blocking rival Bain’s higher bid for privatization

In September, we reported that Bain Capital made a $4.1 billion offer to acquire Japanese software developer Fuji Soft, surpassing a previous bid from private equity competitor KKR. Now, KKR has responded with a strategic move that could potentially block Bain’s higher bid for privatization.

On Wednesday, KKR announced its acquisition of a 35% stake in Fuji Soft, completing the first part of its two-stage tender offer, according to a statement from Fuji Soft. This acquisition grants KKR enough influence to obstruct Bain’s privatization plans, as reported by a source familiar with the situation.

Investors 3D Investment Partners and Farallon Capital, holding a combined 32.7% stake in Fuji Soft, had already agreed to tender their shares to KKR at a price of 8,800 yen per share. Bain, meanwhile, stated it would only proceed with its 9,450 yen per share bid if it receives approval from Fuji Soft’s management, which has yet to occur, Reuters reported.

Since August, Fuji Soft’s share price has hovered between the two bid prices, closing at 9,200 yen on Wednesday. Bain Capital has not commented on KKR’s recent tender results, while KKR confirmed it will launch the second stage of its tender—also at 8,800 yen per share—in mid-November.

Fuji Soft previously acknowledged receiving Bain’s non-binding offer in July, with its board indicating plans to review any formal proposals. Earlier this year, 3D Investment Partners, the largest shareholder in Fuji Soft with a 21% stake, recommended appointing an external auditor to ensure fair evaluation of all takeover bids from global private equity firms, according to Reuters.

Bain has a track record of pursuing acquisitions in the tech sector, including its recent offer for Swiss software firm SoftwareOne, initially valued at 2.9 billion Swiss francs ($3.21 billion). Bain later raised its bid to $3.7 billion after the board rejected the initial offer.

Founded in 1970, Fuji Soft is a key player in Japanese IT, specializing in software development for embedded and control systems essential in machinery and automotive applications. Its offerings span system construction, cloud integration, security, and digital transformation, and it also has operations in leasing office buildings, data entry, contact centers, and regenerative medicine. Headquartered in Yokohama, Japan, Fuji Soft employs around 17,000 people and holds a market capitalization exceeding $4.1 billion.