Unison makes two Japan healthcare acquisitions

Both investments come from the private equity firm’s fifth flagship Japan fund, which is targeting JPY80 billion ($722 million). Half the corpus has been earmarked for healthcare deals.

Reliance was acquired for an undisclosed sum as part of a pharmacy consolidation strategy initiated through Fund IV. The company employs about 254 people across 38 pharmacies in the Hiroshima area and generates annual revenue of around JPY6 billion.

The consolidation effort will support government plans to create an integrated community care system. Unison’s overall pharmacy portfolio now comprises 149 locations, including Reliance. Previous investments under this strategy include drugstore operator KIT.

Unison observes that Japan’s medical and long-term care expenditures have come to represent 10% of national GDP and are expected to rise with the aging population.

“Slowing the pace of inflationary increase in social security spending is a pressing issue in Japan, necessitating the establishment of an efficient system for delivery of high quality medical and long-term care,” it said in a statement.

Tokyo-listed N Field, which focuses on patients with mental disorders, was acquired via a tender offer worth JPY13.2 billion. Unison tabled its bid on February 5 and confirmed completion on March 23, taking an 85.3% stake. The stock remains to be delisted pending final approvals. N Field has a market capitalization of JPY15.8 billion.

N Field also plays to the aging population theme. In addition to providing home nursing, it offers medical life support equipment, and life planning and quality of life consultation for patients with mental conditions such as dementia. Revenue rose 12% year-on-year to JPY11.7 billion in the 12 months ended March 2020, while profit doubled to around JPY406.4 million.

Healthcare is one of three core investment areas for Unison, along with consumer and B2B services. The firm’s early activity in the sector focused on pharmaceuticals, but it has transitioned toward services as inefficiencies and the industry became increasingly exacerbated by demographic trends.

All healthcare services investments are managed as part of the Community Healthcare Coordination Platform, which was set up in 2019 to roll-up various fragmented segments.

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• Topics
• North Asia
• Healthcare
• Buyouts
• Support services
• Japan
• Unison Capital