J-Star's Japan Hospice Holdings set for Tokyo IPO

The company plans to sell 1.9 million shares for JPY780 apiece, according to a filing. This includes 901,100 shares held by J-Star’s second fund and 648,900 shares held by what appear to be two co-investment vehicles. The size of the offering will increase to 2.19 million shares if the overallotment option is fully exercised.

J-Star and its co-investment entities currently own approximately 84% of Japan Hospice, and this will fall to around 70% post-offering. The private equity firm started to assemble the platform in 2014, driven by the realization that Japan’s existing model for end-of-life care was unsustainable.

Since 1975 the number of deaths annually had grown from about 700,000 to over 1.3 million, and it is projected to reach 1.6 million by 2030. Meanwhile, the location of deaths has shifted from the home to the hospital, with the latter accounting for 85% of cases in 2006. With the government poised to introduce reforms that would require hospitals to refocus away from end-of-life cases, J-Star decided to invest in private sector facilities.

The business was built on two core assets: Kairos, a nursing services player in the Kanagawa region, which ran two nursing care stations and a hospice facility; and Nurse Call, which operated two nursing care stations in Nagoya. Japan Hospice has since pursued greenfield expansion and made some bolt-on acquisitions, notably Osaka-based Platia and Tokyo-based Live Cross. Both companies provided residential medical facilities and added hospice care to their offerings.

Japan Hospice now operates 12 facilities comprising 332 rooms. Revenue for the 12 months ended December 2017 was JPY1.89 billion, up from JPY997.4 million the previous year. Over the same period, the company’s net loss narrowed from JPY197.9 million to JPY60.5 million.

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• Topics
• North Asia
• IPO
• Real estate
• Support services
• Healthcare
• Japan
• J-Star