CLSA completes exit from Japan cram school

CLSA CP acquired a majority position in BC Ings in 2016 through its Sunrise II fund, which pursues buyouts of companies with enterprise valuations of JPY5-15 billion ($50-140 million). It sold a 20% stake to Hiroshima Innovation Network (HINET), a regional government entity, in 2017.

HINET acquired a 28% stake in that transaction for JPY900 million, having also subscribed to new shares. It worked with CLSA CP to expand BC Ings’ portfolio of schools, introduce digital teaching materials, programming classes, and after-school childcare among other services. HINET is also exiting to Eishinkan, which is set to become the largest cram school player in western Japan.

BC Ings was founded in 1985 and become one of the largest cram school operators in the Chugoku and Shikoku regions under the Tanaka Gakushukai brand. During the CLSA CP holding period, it acquired pre-school operator Tokyo Gakushusha and medical training-focused high school Akasaka Gakuin. Most of its locations are in the Hiroshima and Okayama prefectures.

CLSA CP’s acquisition was said to be the first-ever private equity investment in Japan’s education sector, which is traditionally highly resistant to external intervention. “Education has been regarded as a sacred business in Japan,” Keisuke Shitomi, a senior vice president at CLSA CP, told AVCJ at the time. “We believe this deal could serve as a breakthrough in the education services industry.”

There has been a smattering of activity in recent years, with J-Star buying the tutoring businesses of Alpha Corporation and Advantage Partners acquiring vocational training provider Abitus and Tokyo Central Japanese Language School in 2019. There has also been some VC investment in software and online-offline technology providers such as Smart Education and Street Academy.

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• Topics
• North Asia
• Consumer
• Exits
• Trade sale
• Japan
• CLSA Capital Partners
• Education