CVC exits Japanese care provider to Polaris
CVC Capital Partners has agreed to sell Hitowa Holdings, a Japan-based provider of cleaning, assisted living and childcare support services, to Polaris Private Equity.
The size of the transaction was not disclosed, but local media reported that Polaris will pay more than JPY50 billion ($455 million). If the figure is accurate, it represents a significant step up in target size for a domestic GP that typically invests in mid-cap companies and it almost certainly involves a sizeable portion of co-investment. Polaris closed its fourth fund at JPY75 billion in 2017.
CVC bought a majority stake in Hitowa in 2016 when the business was known as Hasegawa Holdings. The founder, Yoshihiro Hasegawa, retained a minority interest in the business but Polaris is now taking 100% ownership. The transaction is expected to close in mid-March.
Founded in 1997, Hitowa employs more than 7,200 people across seven subsidiaries that have a combined network of 2,200 service locations, including franchisees. In addition to its core operations of franchise business services – which includes house cleaning and physical rehabilitation – residential and in-home nursing services, and childcare, the company provides staffing, catering and clothing repair services.
CVC claims to have worked with management on expanding the service network, improving customer satisfaction levels, and increasing EBITDA by more than 25%. Yuji Kimura, founder and CEO of Polaris, said in a statement: “Polaris will dispatch several senior officers to Hitowa and work with the existing management team and employees to strengthen its business, providing comprehensive business and financial support ahead of a future share listing.”
Polaris’ past three investments, announced in 2018, were all corporate carve-outs. It acquired Fujitsu’s mobile devices unit, Rakuten’s online marriage services and event planning business, known as O-net, and Hitachi subsidiary Hitachi Automotive Systems Measurement.
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