J-Star owned medical insurer makes bolt-on acquisition
Nihon Hoken Service (NHS), a Tokyo-based insurance agency and insurance solicitation business bought by J-Star earlier this year, has completed the bolt-on acquisition of industry peer Sokisha Corporation.
The deal is part of a broader plan to bring about consolidation in an industry that is already facing higher costs with the impending introduction of the Insurance Business Act, which will increase the social responsibility burden on agents. J-Star hopes to make more acquisitions with a view to building the third-largest player in a market currently dominated by two companies.
NHS focuses on so-called third sector insurance, which includes health, cancer and long-term care cover. The sector - estimated to be worth JPY500 billion ($4 billion) - is expected to see stable growth as a result of Japan's aging population.
While NHS' annual sales are approximately JPY1-2 billion, Sokisha is a significantly smaller player with sales of JPY600-700 million. However, the acquisition combines NHS' strength in the Tokyo metropolitan area with that of Sokisha in Kyusyu and Hokkaido, in the south and north of Japan, respectively.
Sokisha was founded in 1996 by its current CEO Atsushi Ohta and has built multiple sales channels, including telemarketing and online marketing, face-to-face marketing, and partnerships with other companies. NHS has similar competencies, and to these has added an organizational compliance structure that meets the requirements of the impending legislation, according to a release.
J-Star has not disclosed how much it paid for NHS or how much the portfolio company paid for Sokisha. NHS is part of J-Star No.2 Investment, a JPY20.4 billion vehicle which reached a final close in 2013. The PE firm typically targets companies with enterprise valuations of JPY3-10 billion.
Japan's aging population has underpinned other J-Star transactions, including the acquisition last November of acquired two elderly care providers - Nagoya-headquartered Nurse Call and Kanagawa-based Kairos & Company. That deal closely followed a 5x exit from similar business, HCM Corporation.
More on Buyouts
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.