KKR to Acquire Yayoi; Street Says Buy

Global investment firm KKR & Co. Inc. (NYSE:KKR) recently announced that it has entered into a definitive agreement to acquire a Japan-based software developer for small and medium-sized enterprises (SME), Yayoi Co., Ltd. The financial terms of the deal, which is likely to close on March 1, 2022, have been kept under wraps.

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Following the news, shares of the company gained marginally to close at $71.58 in Friday’s extended trading session.

Strategic Impact

With this move, KKR will be acquiring one of the foremost names in financial and accounting software in Japan for SMEs with over 2.5 million registered users.

Further, KKR’s track record in investing in companies focused on providing solutions to SMEs is expected to be beneficial to Yayoi.

Management Commentary

The CEO of KKR Japan, Hiro Hirano, said, “SMEs account for the vast majority of companies in Japan. Considering this, we are pleased to add Yayoi to our global portfolio of software providers, and excited to support this important sector of the Japanese economy as SMEs strive to enhance their operational efficiency by digitally transforming their businesses.”

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Price Target

Recently, Deutsche Bank analyst Brian Bedell reiterated a Buy rating on the stock. The analyst, however, raised the price target from $87 to $94, which implies that the stock has upside potential of 31.3% from current levels.

Consensus among analysts is a Strong Buy based on 8 Buys and 2 Holds. The average KKR price target of $89.40 implies upside potential of 24.9% from current levels. Shares have gained about 80.3% over the past year.