Huge Apple Supplier Plans IPO

Paul Ausick
February 15, 2014

A major Japan-based supplier of display screens for Apple Inc. (AAPL) is preparing an initial public offering (IPO) of about 354 million shares. Japan Display Inc. has announced that it plans to sell 77 new million shares that will trade on the Tokyo Stock Exchange and 63 million new shares to qualified institutional buyers in the U.S.

Pricing will be determined on March 10.

At the same time, the company will hold a secondary offering for a total of 213.9 million shares held by existing shareholders. Again, there are two offerings planned. The Japanese offering includes 117.65 million shares and a U.S. offering of 96.26 million shares. All the U.S. shares will be offered by Innovation Network Corporation of Japan, a government-backed investment fund, and the company will also offer to sell 89.75 million shares in Japan. Sony Corp. (SNE), Toshiba Corp., and Hitachi Ltd. will each offer 9.3 million shares in Japan.

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Japan Display has agreed to an over-allotment of 18 million shares which may be offered by one of the 13 Japanese underwriters. Of the total expected capital raise of $4 billion, some $2.3 billion will go to current shareholders.

The company expects to raise $1.7 billion which it plans to apply entirely to capital investment in the small- to medium-sized display business. Japan Display is already the world’s largest maker of smartphone display screens and supplies screens for the iPhone 5S and 5C as well as display screens for other U.S. and Asian smartphone makers. The company was formed in 2012 from money-losing liquid crystal operations from Hitachi Ltd., Toshiba Corp. and Sony Corp. (SNE).

For the nine months through December, the company posted revenue of just under $5 billion. About 32% of that revenue came from its business with Apple.

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