Houlihan Lokey Advises Riken Corporation

Houlihan Lokey is pleased to announce that Riken Corp. (Riken) has signed a definitive agreement with JFE Steel Corp. (JFE Steel) to acquire shares of JFE Pipe Fitting Mfg. Co., Ltd., (JFE Pipe Fitting) and make it a subsidiary. The transaction was signed on November 4, 2022.

Founded in 1927, Riken Corporation is a listed Japanese company (TYO:6462) and leading supplier of piston rings and other key technology engineering products that originated from one of Japan’s largest research organizations known as RIKEN, the Institute of Physical and Chemical Research.

The target company, JFE Pipe Fitting, is a subsidiary of JFE Steel, the second largest crude steel producer in Japan and the 13th largest in the world. JFE Pipe Fitting manufactures fittings for gas, water, and other piping, and parts for architectural and industrial machines.

Riken's core business is manufacturing and selling piston rings for internal combustion engines (ICE) whose market has been greatly affected by the recent shift to electric vehicles. In its mid-term management plan, Riken conveyed a strong need to strengthen its peripheral businesses through M&A and to address market changes by further expanding its non-ICE businesses, and JFE Pipe Fitting was the perfect match. This transaction was simultaneously positioned as part of a firm-wide portfolio reorganization for the JFE Group, which made this deal strategically meaningful and vital for both Riken and the JFE Group.

Houlihan Lokey acted as the sole financial advisor to Riken. The completion of the transaction is expected in March 2023 after obtaining all necessary approvals.

To learn more about the Riken/JFE Steel/JFE Pipe Fitting transaction, please read the official press release here.

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