UPDATE 2-KKR sells Japan staff agency for $721 mln

Tue Mar 26, 2013 5:44am EDT

* KKR acquired Intelligence for 35 billion yen in 2010

* Sale of Intelligence follows Carlyle sale of shares in Broadleaf

* Japan accounts for 17 pct of priv equity capital returned in 2012, up from 11 pct in 2010

By Junko Fujita and Stephen Aldred

TOKYO/HONG KONG March 26 (Reuters) - KKR & Co agreed to sell Intelligence Holdings to Temp Holdings for 68 billion yen ($721 million), almost double what the U.S. buyouts firm initially paid for the temporary staffing agency three years ago.

Intelligence Holdings now has equity value of 51 billion yen, up from 32.5 billion yen at the time of KKR's purchase, the U.S. buyout firm said in a statement on Tuesday.

KKR's exit from Intelligence coincides with a rise in Japan's contribution to overall private equity returns in Asia, and follows Carlyle Group's recent $214 million sale of shares in auto parts supplier Broadleaf.

Japan accounted for 17 percent of capital that private equity firms returned to investors from Asia in 2012, up from 11 percent in 2010, according to recent data from Asia Private Equity Review (APER).

KKR bought Intelligence from Japan's Usen Corp in 2010 for 35 billion yen as the struggling Japanese corporation sought to sell off non-core assets.

Private equity firms, however, face potential competition for such assets from government-backed funds.

Earlier this month, KKR, Bain, Carlyle and other private equity firms urged Japan's government to shrink the role of these funds, saying they could squeeze out opportunities for private capital and delay restructuring for troubled companies.

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