TOKYO : Investors pushed Bain Capital to almost halve the valuation it was seeking for Japan’s Kioxia in an IPO, leading the U.S. buyout firm to scrap its plans for an October listing of the memory chipmaker, two sources said.
Kioxia, known as Toshiba Memory when it was acquired from Toshiba by a Bain-led consortium in 2018 for 2 trillion yen ($13.4 billion), ditched the October IPO plan, Reuters reported last month, citing sources.
That decision came after global investors wanted a market value of around 800 billion yen for the chipmaker, said the two sources, compared to Bain’s target of 1.5 trillion yen.
The valuation gap complicates the buyout firm’s effort to exit its six-year-old investment in Kioxia. It reflects concerns investors have over the strength of the memory chip market, the sources said.
Details of the valuation sought by investors, who met with Kioxia in August and September, have not been reported previously.
“An IPO this year looks difficult given NAND market conditions although it may be possible by the end of the financial year,” said a fund manager at an Asian hedge fund who met with Kioxia, referring to the memory chips in which Kioxia specialises.
Kioxia has undergone years of upheaval, including its carve-out from scandal-hit Toshiba and stalled merger negotiations with partner Western Digital due to opposition from investor SK Hynix.
Memory chipmakers have been hit by lacklustre demand for smartphones and PCs, with Kioxia also facing tough competition from South Korean and U.S. rivals.
While NAND prices have improved this year due to the spread of artificial intelligence, price rises have plateaued, said Akira Minamikawa, senior analyst at Omdia.
The implementation of AI in smartphones and PCs is expected to drive replacement demand next year onwards, he said.
Kioxia is focused on NAND flash memory, which it
