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Rigaku, a Japanese maker of semiconductor testing equipment backed by Carlyle, slumped in its trading debut in Tokyo on Friday.
The shares declined 10.3% to ¥1,130 ($7.4), cutting its market capitalization to about ¥255 billion. They were sold at ¥1,260 each, at the top of the price range. The IPO raised ¥112.3 billion (about $750 million), making it Japan’s second-largest IPO this year after subway operator Tokyo Metro’s ¥348.6 billion ($2.3 billion) deal, which was the country’s largest in nearly six years.
Founded in 1951, Rigaku makes tools used to measure semiconductor wafers and inspect them for defects and contamination. The Tokyo-based company also makes machines for the materials science and pharmaceutical industries.
For the fiscal year 2023, Rigaku reported that revenue rose 27.4% year-over-year to ¥79.9 billion (about $525 million), while profit increased 141% from the previous year to ¥15.3 billion. Rigaku makes a third of its revenue from the semiconductor and electronics industry. The company benefits from the increasing complexity of the chip manufacturing process.
Rigaku’s biggest market is Japan, which contributes 31% of total revenue. Japan is a major link in the global semiconductor supply chain. The country is home to the billionaire Uchiyama family’s Lasertec (chip testing equipment), KKR-backed Kokusai Electric (chip production equipment), Bain-backed Kioxia (memory chips), Renesas Electronics (auto chips), Tokyo Electron (chip production equipment), Advantest (chip testing equipment), Sumco (silicon wafer supplier) and Shinko Electric (chip packaging).
Carlyle bought a roughly 80% stake in Rigaku in 2021 for an undisclosed sum. The private-equity giant’s other investments in Japan include KFC Japan, Orion Breweries, lighting and electronic equipment company Iwasaki Electric, coated abrasives maker Sankyo Rikagaku, construction materials company Senqcia and electric wire maker Totuko.
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