Japan's J-Star exits pet services business

Création take J-Star’s entire 75% stake in Three Arrows, which the GP bought in 2012 for JPY1.8 billion (then $22.5 million). Financial details of the exit have not been disclosed, but according to a statement the transaction will leave Création as the sole shareholder in the company.

Based in Tokyo, Three Arrows manufactures clothes, toys and other items for pets. The company was the first investment by Création, which had previously operated purely as a financial advisor. The firm decided to participate in the acquisition, along with a local venture capital investor, as J-Star’s funds at the time were not sufficient to acquire the entire company.

Création was also a buyer in a previous exit by J-Star, acquiring repair business Burn Holdings from the GP in 2014 alongside Shinsei Corporate Investment.

Japan’s pet market is typically valued around JPY1.4 trillion per year, with animal life expectancy rates considered higher than the global average due to more dogs and cats being kept indoors. J-Star is also targeting the opportunity through the country’s veterinary industry, building a veterinary services platform through existing portfolio company JVCC. The GP has made two bolt-ons to the company this year, acquiring clinic and salon chain Fuji Field in April and clinic chain VIS Corporation in August.

J-Star is investing from its third buyout fund, which closed at JPY32.5 billion in April. The vehicle targets control and co-control investments in companies with valuations of JPY3-10 billion, typically writing equity checks of JPY1-3 billion.

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• Topics
• North Asia
• Consumer
• Trade sale
• Buyouts
• Japan
• J-Star
• M&A