J-Star acquires Japan drug wholesaler Genex

This is the seventh acquisition in 2020 for the firm’s fourth lower middle-market fund, which closed at the hard cap of JPY48.5 billion ($467 million) in November last year. Check sizes typically fall in a range of JPY1-3 billion.

Genex specializes in generic drugs and is considered one of the leading independent operators in its space. Logistics are handled from three distribution centers in Nagoya, Sapporo, and Fukuoka. J-Star said in a statement it expected to see growth on the back of rising demand for generics related to increasing healthcare care costs.

Much of the Genex business thesis is based on Japan’s aging population, which the company describes as 25% elderly. According to official data, the over-60 age block will account for almost 40% of the population by 2050.

The phenomenon has put increasing pressure on healthcare services, notably stretching the social security system, contributing to a shortage of doctors and nursing staff, and creating a supply-demand imbalance in the pharmacy space. Recent private equity activity targeting this theme includes Polaris Capital offering to privatize pharmacy chain operator Sogo Medical.

Previous investments by J-Star’s fourth fund include aquaculture industry supplier Dainichi, IT industry jobs search platform Gino, and recycling and waste management operator Sincere. Last month, it acquired a controlling stake in Shirayuki Fuukin, a brand of decorative homeware and kitchenware.

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• Topics
• North Asia
• Healthcare
• Support services
• Buyouts
• Japan
• J-Star
• Logistics
• Pharmaceuticals