Bain Capital Agrees to Buy Citigroup’s Bellsystem24

Bain Capital Agrees to Buy Citigroup’s Bellsystem24

Nov. 14 (Bloomberg) -- Bain Capital LLC said it agreed to acquire Bellsystem24 Inc., Japan’s biggest telemarketing firm, from Citigroup Inc. for 120 billion yen ($1.34 billion).

Bain will receive 79 billion yen of loans from Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. to help fund the transaction, it said in an e-mailed statement today.

Citigroup, which turned to the U.S. government for a $45 billion bailout, has sold more than $7 billion of its Japanese assets this year. Boston-based Bain is gaining a company that has 5,000 contracts with businesses in Japan and overseas and posted a full-year profit of 8.7 billion yen, according to the telemarketer’s Web site and financial statements.

“Bain must ultimately be thinking about an initial share sale for the company,” said Makoto Haga, chief strategist at Tokyo-based securities firm Monex Group Inc. “We’ll wait and see how the U.S. firm can boost its corporate value.”

Nikko Principal Investments Japan Ltd., Citigroup’s Japanese investment unit, had talked to bidders including CVC Capital Partners Ltd. and Permira Advisers LLP, three people familiar with the negotiations said last month.

“We expect Bellsystem24 to remain competitive in this fast growing call-center industry,” Bain said in its statement. “However, it needs more innovation and development to keep growing.”

Bain Investments

Nikko Principal spent more than 220 billion yen to acquire a controlling stake in Bellsystem24 in 2004. The telemarketer had 2,068 employees and 30,093 contract workers as of February, according to its web site.

Bain has invested in consumer, media, healthcare and information technology companies in Japan, according to the Web site. It expects to complete the acquisition of Bellsystem24 by the end of this year.

Citigroup Global Markets Japan Inc. and Goldman Sachs Group Inc. advised Nikko Principal.

New York-based Citigroup earlier this year sold Nikko Cordial Securities Inc. and a part of its investment banking business at Nikko Citigroup Ltd. to Sumitomo Mitsui Financial Group Inc. for 545 billion yen.

It also sold its trust banking and asset management units in Japan to Nomura Holdings Inc. and Sumitomo Trust & Banking Co., respectively.

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