Blackstone Taps Japan’s Romance Manga Fans in $1.7 Billion Deal

(Bloomberg) -- Blackstone Inc. is betting on the popularity of Japanese manga with a $1.7 billion deal to buy a digital provider of romance comics.

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The world’s largest alternative asset manager will launch a tender offer for Infocom Corp. in its biggest private equity transaction in Japan to date, the US firm said in a statement on Tuesday.

The deal will allow Blackstone to tap into Japan’s digital manga market, which has rapidly grown into a $3 billion industry. Infocom’s main source of revenue is from Mecha Comics, a website and app where users can pay as little as a few cents to read a chapter of serialized comics. Some of the most popular titles include workplace comedies or fantasy melodramas with intimate romantic storylines.

Blackstone will look to grow original content from Infocom’s network of manga artists, developing more works around themes enjoyed by its reader base of women — a demographic that has growing disposable income, said Atsuhiko Sakamoto, head of private equity in Japan.

“The more original content we have, we can monetize that intellectual property over time,” Sakamoto said in an interview. “We can create animation or merchandising around that, which is going to be the potential opportunity in the midterm.”

Right now, original content brings in about 10% of revenue, but about half of the 10 most popular titles are home-grown products, Sakamoto said. More than three-quarters of its customers are women, mostly in their 30s and 40s.

Global interest in Japan-created content has surged as streaming companies rush for rights to stories that have already resonated well to produce live action or animated shows. Some of Japan’s best-known anime, such as Dragon Ball or Naruto, started as serialized manga before gaining global popularity. Recent Netflix hits like One Piece and YuYu Hakusho were also originally manga works.

“I’ve spoken to big players in Hollywood who said they are envious of Japan because it has this back catalog of extraordinary, world-building intellectual property in its vaults of manga that has not been tapped,” said Roland Kelts, author of Japanamerica, a book on the nation’s pop cultural influence in the US.

Digital manga sales in Japan grew 7.8% in 2023 to around 483 billion yen ($3.1 billion) — nearly double the revenue in 2019, according to the Research Institute for Publications. Concurrently, sales of print manga have been falling and were down 8% last year.

Blackstone will buy a majority stake in Infocom from Teijin Ltd. and launch a tender offer for the rest at 6,060 yen a share, a statement from the e-comic company showed on Tuesday. The deal values Infocom’s equity at about 275 billion yen ($1.7 billion), making it one of the biggest acquisitions of a Japanese company announced this year, according to data compiled by Bloomberg.

Shares of Infocom rose 5.1% to 6,030 yen at the close of trading in Tokyo. The stock has more than doubled since early March, when reports emerged that chemical manufacturer Teijin was looking to sell its stake.

Bloomberg had previously reported that Sony Group Corp.’s music arm and KKR & Co. were also interested in Infocom.

Sakamoto said that while Infocom has a small English-language business in North America, Blackstone would first focus on building up original content creation in Japan before trying to grow overseas. Owning the content would also make it easier.

The New York-based firm is looking to expand the business over five years and exit through a public offering, though Sakamoto noted there would likely be companies interested in buying the business.

“If we build a nice content business, I think it’s going to be very attractive to a lot of people,” he said.

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