Houlihan Lokey advises Daiwabo Holdings on its sale of Daiwabo to Aspirant Group

Houlihan Lokey is pleased to announce that Daiwabo Holdings Co., Ltd. (DHD) has sold Daiwabo Co., Ltd. (Daiwabo, dba Daiwa Spinning) to Aspirant Group Inc. (Aspirant). The transaction closed on March 27, 2024.

Founded in 1941 and headquartered in Osaka, Japan, DHD, the seller, is a TSE-listed holding company with approximately $1.8 billion in market capitalization and about $6.7 billion in annual revenue for the fiscal year ended 31 March 2023. DHD operates three business segments: IT infrastructure distribution, fiber, and industrial machinery.

Daiwabo, the target company, is the core subsidiary of DHD’s fiber business, which manufactures a variety of textiles. It is the founding business of the Daiwabo Group with over $400 million in annual revenue for the fiscal year ended March 31, 2023. In 1941, four Japanese cotton-spinning companies merged to form Daiwabo, contributing to Japan’s postwar economic development in the textile industry and becoming one of the leading textile manufacturers in Japan today.

Aspirant, the buyer, is a Japanese mid-cap private equity firm founded in 2012 with an extensive track record in investing in the industrial sector and carve-out transactions.

Over the years, the main business of DHD has shifted from the fiber business, the original foundation of the group (currently 7% of total revenue), to the IT infrastructure distribution business (92% of the same), due to the gradual decline of the Japanese textile market. Despite this, its capital expenditure in FY18–22 accounted for 51% of the total, resulting in low capital efficiency of the overall Daiwabo Group. This led to DHD’s decision to divest Daiwabo as part of its ROIC-oriented corporate strategy, and to further focus on the IT infrastructure distribution business.

Houlihan Lokey served as the exclusive financial advisor to DHD. This transaction marks the first significant repositioning of the Japanese textile industry since the 2000s, highlighting the firm's extensive expertise in the textile sector and its solid long-term relationship with DHD.

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