The Carlyle Group Acquires Rhythm

Tokyo, Japan - Global private equity firm The Carlyle Group today announced it has acquired Rhythm Corporation, an automotive component manufacturer based in Japan, from private equity funds managed by an affiliate of JPMorgan Partners, LLC (JPMP) and from Rhythm management. The JPMP funds and management acquired Rhythm from Nissan Motor Corporation in an MBO transaction in August 2002.

Under the terms of the transaction, The Carlyle Group and Rhythm management will acquire 100% of the outstanding shares in Rhythm. Financial terms of the transaction were not released.

Rhythm is a manufacturer of ball joints and other structural components supplied to major Japanese and American automakers, including Nissan. In the two years since being acquired by the JPMP funds, its annual sales have risen by more than 30% to 30.4 billion yen, with a large portion of those new sales coming from outside Japan.

Tamotsu Adachi, Carlyle Managing Director and Head of the Japan Team, said, “Rhythm today is an highly regarded auto parts maker, with a very strong management team, the highest quality products and a very solid market position, based on an expanding customer base that includes many of the world’s leading auto manufacturers. The auto industry is one of our core target sectors in Japan.We believe Carlyle’s global platform and auto industry expertise will enable us to assist the company to become an ever stronger global player in its industry.”

John Lewis, Japan Representative of J.P. Morgan Partners Asia Pte. Ltd. and Advisor to the manager of the JPMP funds, said that when the JPMP funds acquired Rhythm, the funds “brought a lot of successful auto industry experience and local and global operating expertise, and set challenging performance targets for the company. JPMP is delighted that these targets have been met and exceeded more quickly than anticipated. Management has done an excellent job, and has been a good partner to JPMP. We believe this is an ideal time for Rhythm to transition to new owners, well placed to help guide the company to the next level of growth.”

Katsuo Kitamura, President and CEO of Rhythm, said, “We are extremely pleased with the progress Rhythm has made in partnership with JPMP. Rhythm has successfully transitioned from a captive parts supplier, as part of the Nissan keiretsu, to a strong, independent and rapidly growing global components supplier. We are equally pleased to enter a new partnership with such a strong firm as Carlyle. We believe the prospects for Rhythm are encouraging.”

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