Japanese stationery maker buys into Pentel

By Taizo Wada for Nikkei Asian Review

Japanese stationery maker Kokuyo has indirectly taken a 37% stake in compatriot pen maker Pentel through an investment fund, the company said Friday.

Kokuyo, the country’s leading maker of stationery products with a strength in notebooks, will invest 10.1 billion yen ($92 million) in a fund operated by Mercuria Investment, which currently serves as the largest shareholder of Pentel. Kokuyo will become the fund’s, and through it, Pentel’s top shareholder.

Pentel is an unlisted company known for producing the world’s first modern mechanical pencil in 1960. More recently its colorful gel ink ballpoint pen has won a devout following around the world.

Kokuyo aims for growth in Asia, where stationery demand is expected to increase, and other markets by tapping Pentel’s overseas sales network.

Kokuyo only makes about 20% of its stationery-related sales overseas, while Pentel generates over 60% of its revenue abroad through roughly 20 foreign sites. The companies’ products are also complementary, given Kokuyo’s strength in notebooks and Pentel’s know-how in writing instruments.

The fund operated by Mercuria, a private equity company listed on the Tokyo Stock Exchange’s first section that counts the state-run Development Bank of Japan as an investor, acquired Pentel shares from the pen maker’s founding family last year.

Mercuria will continue to contribute to Pentel’s management after Kokuyo’s investment.

“We do not know any information other than what was in the disclosure. We will explore a response going forward,” Pentel said.

Pentel booked sales of 40.9 billion yen in the year ended March 2018. Kokuyo has sales of 315.1 billion yen.

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