Japanese OEM Fujitec Exploring Sale to Private Equity

Japanese OEM Fujitec is in talks with private equity groups, including Sweden’s EQT, about a potential sale of its approximately US$2.1-billion elevator and escalator business, the Financial Times reports. The source said that “multiple people familiar with the matter” have said that Fujitec, founded in Osaka in 1948, is working with UBS in Tokyo to find a buyer and that some major international private-equity groups have passed on the deal for reasons including price. The potential sale of Fujitec “may signal further consolidation of the US$80-billion global elevator industry” and offer merger opportunities in an industry that is highly fragmented outside of the “big four” — KONE, Otis, Schindler and TK Elevator. One longtime Fujitec investor said a merger with Mitsubishi Electric is also a possibility. As the Chinese real estate market continues to struggle, in turn stifling demand for new elevator equipment, OEMs including Fujitec are revamping their strategies to focus on emerging markets such as India and Indonesia, as well as recurring revenue from modernization and maintenance.