In 2022, recently we finished several merger and acquisition deals for European clients to purchase Japanese companies in Japan. One case took around 3 years from the start of search of target.

The other case only took 6 months. With the latter case, our client bought a company with global operation so that the client instantly gained the footprints in new markets. 

We have been supporting M&A deals in many countries, such as in Japan, China, Europe, SE Asia with target finding and due diligence.

With the weak Japanese yen and corona impact on the economy are not really bad for M&As if you buy a Japanese company in Japan.

Sometimes some companies ask us if they can buy/invest into a whiskey distillery in Japan because the Japanese whiskey being super popular globally.  The answer is Yes, but a very very tough to find a case and very very expensive. 

But if you look for a beer or sake brewery in Japan, you may have more chance. A global player, we also think why do not you look at whiskey distillers in Eastern Europe or SE Asia? Invest now into these and there shall be next big brands from your investment maybe.

When our client in Japan wanted to buy a hotel in HCMC, Vietnam and BKK, Thailand, we flew there and found the targets.

When one client wanted to invest in an online marketing company in Malaysia, we introduced the CEO- owner to them.

When one German client asked us to find a possible M&A target for CRM solution in Japan, we found the target and its owners, and negotiated the deal successfully. 

Some deals took just 6 months to finish and some took 3 years. Of course, many deals also broke in the middle.

Are you planning to enter Japan market?

Consider M&A in Japan. It is probably the easiest way to enter Japan.

Consider this: to make a real business in Japan, if you do a organic growth, you need to set up a legal entity, hire people (finding good people being very tough due to a labor shortage), gaining necessary permissions. 

Well, if you can buy all these at once, it shall reduce your burden and you can focus on your business growth as early as possible!

It means "you buy the time".

As we are in M&A field for many years, many contacts talk to us about the potential deal.

So...how to buy a Japanese company?

The most difficult part is to find an actual target company.

The seller/owner of a company does not really want to put the sales info online.  You may find some public information but we see almost all cases are over inflated.

To find a good/fair deal, you must go offline. You need to talk to a company/person widely connected offline.

There are many hotels/inns on sales as well as office buildings in Japan due to the covid 19 pandemic. But if you want to buy a great company in a great growing field, you usually do not find it.

The reason is simple: no one wants to sell a great company.

There are few exceptions for this. For example, when the owner is old and plans to retire, she/he may sell the good company. We met many company owners in Japan who are in 70s, 80s and 90s who want to find a right heir for their companies but could not.

There was one company which offered 1million USD for a new CEO candidate. There were two three candidates but in the end all of them were fired (left voluntarily "on paper").

The famous SOFT BANK group owner Mr. Son opened a "school" to select the next owner candidates. There were many young entrepreneurs in that school (One of the candidates was our close friend in fact). But Mr. Son did not pick anyone from that school. He picked one from outside.

Not easy to find a right heir. This way, some owners want to sell their companies. Then, they usually talk to their accountants, lawyers and close family/friend (other business owners who may buy the company) first. After this, they talk to M&A advisory or fund.

We have great connections with the accountants and lawyers, business owners and M&A advisories in Japan. This channel keeps us informed about potential target company in Japan.

In the corona pandemic, there are many businesses going bankrupt or civil rehabilitation proceedings in Japan.

One of the biggest fashion companies called RENOWN (already owned by a Chinese company) filed for bankruptcy, White Bear - a major travel agency and also Air Asia LCC was out of business in 2020.

It is usually our recommendation that you buy a company from bankruptcy or equivalent.  Why? It is because you can acquire a company at a very good price and the debt is normally reduced by 90%.

We have had some cases where the owners want to sell their company at 1JPY (less than 10 cent).

Of course, this is not for somebody who do not understand the business. There are reasons why these companies were not doing well and the owner needed to give up. 

How we help? If you want to buy, we find target companies to buy. If you want to sell, we find a company which may be interested in investing in your company. We work with our accountant and legal firms which can carry out due diligence.

We share some examples of the companies you can or could buy. In this section, if we talk about hospitality industry merger and acquisition, we focus on hotels and ryokans (inn), hostels often with hot springs.

Here we have some example of the companies in Japan to sell.

Here are the example of company and industry the companies for sales are:

• Rentacar company
• Beer brewery 
• Japanese sweet manufacturer/brand and some outlets
• Japanese sake brewery (very popular! the catch is...all facility demolished already. You need to heavily invest to build the factory and hire people. The important asset is the license to produce alcohol.)
• Water supply/sewage system construction
• Fitness club chain
• Online education company
• Nursing home
• Construction company
• Vet hospital
• Acupuncture clinic chain
• Software development
• Meat processer
• Car parts whole sale
• Venture capital
• Whole sale
• Timber trading 
• Café franchise chain
• Chinese restaurant chain

Some of them in Tokyo area, some in Osaka and Kyushu, and Hokkaido.

Most of them annual sales somewhere between 1-50 mil USD, EBITDA being 0-5 mil USD. Some calling price only starts with 0.5 mil USD up to 13 mil USD.

Many deals go away quickly so that we can not guarantee the deal is still on the table when you want to know more about it. If any of these interests you, we try to provide more info.

Unfortunately, we never work with any middle company/agent so to provide the cheapest deal for all parties. If you contact us as a buyer, you need to be the direct buyer.

We need to provide the name of the buyer for more details. 

If you are a foreign company, please keep in mind that:

1) Naturally the deal will be more complicating where the mindsets, cultures, language, expectations, all need to be coordinated.

2) You will be charged more than normal domestic deal. Simply, the workload is more than domestic deal. And, the owner expects to earn more from a foreign company, otherwise the motivation could not be higher to go through all the trouble.

3) Many owners in Japan just do not want to sell to foreign company. Some are due to the above two points (which may mean simply a "trouble" for them). Some owners have a stigma about a foreign firm buying their companies even though your offer is higher than other Japanese company. No hurt feeling.  It is not unique for Japanese companies but also we saw in Europe and the US. So you may get a flat rejection from the target company with not much explanation, but do not get disappointed.

Patience is the key for success.

Do you want to buy/invest into a company in Japan? Or do you want someone to invest in your venture? Contact us right now.