J-Star acquires Japan aquaculture business

Aquaculture and related seafood industry interests have become a significant investment theme in recent years on the back of growing demand for high-quality protein in developing Asian markets as well as increasingly strict requirements around cleaner and more transparent production processes.

“Given the heightened environmental awareness including the promotion of the SDGs [UN sustainable development goals], demand for farmed fish is increasing worldwide,” J-Star said in a statement. “In response to such a trend, it is expected that the exports of fish farmed in Japan will increase and that the major mass retailers and the restaurant industry will shift from natural fish to farmed fish.”

Dainichi was founded in 1973 as a feed supplier in the Uwajima, an important fishery-focused port in Japan’s south. The company has since transitioned into marketing its own farmed fish, including yellowtail, bluefin tuna, and red sea bream. The company claims to leverage advanced technologies in these operations. 

Dainichi’s core brand, Ya-To-Ya, is positioned as an environmental product developed in partnership with the local farmers on the west coast of Shikoku Island. This area is characterized by nature reserves, culturally sensitive sites, and fertile, sheltered inlets. AVCJ understands the company recorded sales of JPY21.5 billion and EBITDA of JPY1.3 billion during the financial year ending in January 2020.

This is J-Star's fourth acquisition from its fourth fund, which closed last year at the hard cap of JPY48.5 billion ($460 million) and typically deploys in a range of JPY1-3 billion. There is a strong focus on value-add, platform-based segment consolidations, and leveraging various consumption and industrial themes in Japan’s demographics-driven macro environment.

Previous deals include waste management operator Sincere, restaurant chain Pepper Lunch, and Gino, an IT industry job search platform.

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• Topics
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