MBK targets $639m acquisition of Japan aged care business
MBK Partners has joined the list of private equity firms pursuing deals in Japan’s aged care and healthcare space, having launched a tender offer for Tsukui Holdings Corporation at a valuation of JPY66.9 billion ($639 million).
The company’s board has endorsed a bid of JPY924 per share, which represents a 44.38% premium to the February 5 closing price. Tsukui’s stock was suspended from trading on February 8 at JPY685, having gained 7% for the day.
MBK needs 29.3 million shares, or a 41.08% stake, to be submitted for the tender if the offer is to proceed. Tsukui Kikaku, the largest shareholder in the Tsukui Holdings with a 25.58% interest, and Hiroshi Tsukui, the company’s president, will not tender any shares, according to a filing. The goal is for MBK and Tsukui Kikaku to become the sole shareholders on completion of the offer.
Debt financing for the transaction will come from MUFG Bank, Bank of Yokohama, JC Fund, and Turtle Finance.
Tsukui Holdings was established by Sukeroku Tsukui in 1969 as a civil engineering business. It entered the nursing care space in 1983 by offering home-visit bathing services. Outpatient daycare, nursing homes and assisted living facilities were introduced over the next 30 years. The company now has approximately 700 directly managed facilities, most offering day services.
Recognizing Japan’s intensifying demographic challenges – an aging population will lead to more demand for services, while a shrinking working-age population means there will be fewer people to provide them – Tsukui Holdings has sought to diversify its business. There are dedicated units for outsourced medical staffing, education and training, equipment leasing, and IT services.
The company generated JPY91.2 billion in sales for the 12 months ended March 2020, up from JPY86.3 billion the previous year. Over the same period, net profit fell from JPY2.17 billion to JPY1.96 billion. Day services accounted for 60.1% of revenue, with 19.8% coming from residential services, 8.8% from staffing services, and 8.6% from home care.
Other private equity activity in the aged care space includes Bain Capital’s JPY122 billion take-private of Nichii Gakkan. The company provides business management and human resources support for hospitals and clinics as well as offering in-home and residential aged care services. Bain and Polaris Capital Group have also completed deals in the pharmacy and outsourced hospital services segment, acquiring Kirindo Holdings and Sogo Medical Holdings, respectively.
Japan’s aging population is a consistent theme, whether it means addressing rising demand for aged care services or increasing pressure on general healthcare services.
More on North Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.