Japanese private equity firm Endeavour United is seeking to exit its interest in Kodama Chemical Industry [TYO:4222], a Tokyo-headquartered company engaged in the automotive component manufacturing business, sources familiar with the matter said.

Teasers have been already delivered to potential buyers, including Japanese PE firms, with Pinnacle retained as a financial advisor to run a sale process, according to two sources.

Endeavour United II Investment Business Limited Partnership, a fund under management by Endeavor United, owns a 66.71% stake in Kodama Chemical Industry, but only 33.68% in voting rights, according to its financial report for the year ended March 2023.  The fund also has 7,812,500 Class-A shares in the company, the same report said.

Kodama Chemical Industry, with a market capitalization of JPY 2.3bn (USD 15m), generates about JPY 1bn in EBITDA, one of the sources noted, with sales of JPY 15bn for the year ended March 2023.

The company received investment from Endeavour United in early 2020 as part of a business turnaround Alternative Dispute Resolution (ADR) proceeding it filed, aiming to improve its financial structure, as announced at that time.

Kodama Chemical announced on 27 June that its ADR proceedings would end on 30 June under all creditors’ consent given all the debt associated with the ADR process (JPY 3.59bn) will be repaid by a syndicated loan arranged by MUFG Bank for JPY 3.59bn.

Kodama Chemical filed for a Business Turnaround ADR Proceedings under the Industrial Competitiveness Enhancement Act on 8 January 2020, according to a company release on 14 April 2020.

Established in March 1946, the company has 194 employees, according to a report from Tokyo Shoko Research (TSR). Its relationship banks are Mitsubishi UFJ Trust Bank, MUFG Bank, Saitama Resona Bank, Sumitomo Mitsui Banking Corporation (SMBC), Shoko Chukin Bank, Bank of Iwate, Mizuho Bank, Bank of Yokohama, Kiraboshi Bank and Aozora Bank, the same credit report said.

Its customers include TOTO HIGH LIVING, Hayashi Telempu, Toshiba Carrier, TOTO PLATECHNO, Shinei Kogyo, Suiryo Plastics, Kyodo and HOWA, according to the TSR report.

The company operates three business segments: “Mobility”, “Living Space” and “Advanced & Essential”, according to its website.

Under the Mobility segment, the company manufactures automotive components, including consoles, bumpers, door trims, while under its Living Space segment, it makes housing parts and refrigeration equipment. It also manufactures game software packages under the Advanced & Essential segment, as per its website.

Endeavour United, Kodama Chemical and Pinnacle did not return requests for comment by the press time.