Fujitec Co. (TSE: 6406) — PE Investment Memorandum
Conclusion
CONDITIONAL PASS — decline the US$4.1bn ask, counter at ~US$3.5bn EV
- Recommendation
- CONDITIONAL PASS
- Co-investment
- US$1.0bn (~22%)
- Ask → Counter
- $4.1bn → ~$3.5bn EV
- Returns at ask
- 17.2% IRR / 2.19×
- Returns at counter
- 20.7% IRR / 2.53×
- Hurdle
- 20%
A private-equity investment memorandum prepared for the APECS PE Case Competition 2026, evaluating a US$1.0bn minority co-investment (~22%) alongside EQT in a take-private of Fujitec. Built on a full three-statement model, the memo recommends a CONDITIONAL PASS: decline the US$4.1bn ask and counter at roughly US$3.5bn enterprise value. The key insight is that the deal is a hurdle-fit rather than an over-valuation problem — base-case returns of 17.2% IRR / 2.19× at the ask fall short of the 20% hurdle, while 20.7% IRR / 2.53× at the counter clear it.
Transaction and recommendation
The mandate evaluates joining EQT's take-private of Fujitec as a minority co-investor, committing US$1.0bn for roughly a 22% stake. The verdict is a CONDITIONAL PASS: the target is attractive, but not at the seller's US$4.1bn ask. The framing is deliberate — this is a hurdle-fit problem, not an over-valuation problem: the business quality supports the deal, but the entry price must come down for the return to justify the fund's cost of capital.
Returns bridge and hurdle
Entry price decides the deal
The same base case falls short of the 20% hurdle at the ask and clears it at the counter
Base-case returns: 2.19× MOIC at the ask, 2.53× at the counter.
At the US$4.1bn ask, the base case generates a 17.2% IRR and 2.19× multiple of invested capital — below the fund's 20% hurdle. At the counter of roughly US$3.5bn EV, the same base case produces a 20.7% IRR and 2.53× MOIC, clearing it. The gap between the two outcomes is driven almost entirely by entry price. Bear, base and bull cases are built on an all-equity, EBITDA-growth × exit-multiple framework.
Value-creation thesis
The operating thesis rests on three pillars: aftermarket compounding — recurring maintenance and modernization revenue attached to an aging installed base of elevators and escalators; geographic growth in India and Southeast Asia, where urbanization supports new-equipment demand; and a margin re-rating from 6.7% to 15.5%, closing the gap to best-in-class global peers. Together these drive the EBITDA growth behind the exit-multiple math.
Modeling approach
The analysis is underpinned by a full three-statement model linking income statement, balance sheet and cash flow, giving the returns work a coherent operating and financing foundation rather than a standalone LBO screen. Scenario analysis isolates the two levers that matter most for a minority equity position: how much EBITDA compounds over the hold and what multiple the asset commands at exit.