Bain's Kioxia gains hit 2.5 trillion yen, a Japan PE record

2026-07-25

Bain-led buyout and sale

Following the rise in Kioxia Holdings' share price, Bain Capital's sale gains are estimated at about 2.5 trillion yen, according to the report. That would be the biggest return yet for a domestic deal by a private equity fund.

The estimate was based on large-shareholding reports and other filings involving special purpose companies. Toshiba Memory, now Kioxia, was bought by Bain in 2018 from Toshiba, which was then in the middle of a turnaround, through four special purpose companies. At the time of the investment, Apple and Dell also contributed funds.

Shareholder mix changed sharply

In the prospectus at the time of the December 2024 initial public offering, the four special purpose companies held about 55%. Toshiba, which reinvested after the sale, held about 40%, while Hoya held about 3%. As Kioxia shares began to climb around the summer of 2025, Bain and Toshiba moved into full-scale selling.

Yuji Sugimoto, Bain's head of Japan, said the business was cyclical in the short term, but that he was confident corporate value would rise faster than gross domestic product over the medium to long term. Bain has also invested in Nichii Holdings and Skylark Holdings, but the Kioxia deal stands well apart as its strongest result.

Impact of SK hynix

Sugimoto said the rewards from the success were also shared with employees in the form of stock options. Although most of the shares have been sold, Sugimoto and partner Shoji Suenokubo remain Kioxia directors at Bain.

Meanwhile, Toshiba booked 220 billion yen in non-operating profit in the fiscal year ending March 2026 from the sale of Kioxia shares and valuation gains. Of that, sale gains were estimated at about 80 billion yen, giving it a return of a little more than twice its investment.

According to the latest large-shareholding report, the top shareholder shifted from Bain to Toshiba, which holds 15%. The beneficial owner of the special purpose company that is the second-largest shareholder with a 14% stake is South Korea's SK hynix. It holds bonds that can be converted into nearly all of the special purpose company's shares. Kioxia and SK compete in semiconductor memory.

SK contributed 395 billion yen to the special purpose company through convertible bonds. SK currently has no voting rights in the special purpose company, but once the CBs are converted into shares after approvals under competition laws in each country, it will become a shareholder with voting rights.

SK is a major player in NAND flash memory for long-term storage, a field also served by Kioxia, and accounts for about 20% of the global market. It plans to invest 8 trillion won, or about 8 trillion yen, to bring a new NAND plant online in the first half of 2029. The investment scale is far larger than Kioxia's.

Kioxia said SK's share conversion could mean its voting rights may not align with the interests of ordinary shareholders because the two are competitors. Investors also need to pay close attention to Kioxia's shareholder structure, where interests are intricately intertwined.

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