J-Star targets buyout of JASDAQ-listed drugstore chain
J-Star has launched a tender offer for drugstore chain Aisei Pharmacy that values the JASDAQ-listed company at approximately JPY12.7 billion ($112.5 million). This is the private equity firm’s first-ever tender offer.
A vehicle owned by J-Star is offering to buy up to 2.38 million shares in Aisei at JPY5,300 apiece, according to a filing. The company's stock closed at JPY4,380 on February 4, the day before the offer was announced. An agreement is in place with existing shareholders that will see 765,700 shares - or a 32.11% ownership stake - voted in support of the tender offer.
Established in 2000, Aisei has over 300 stores and follows a mall-style approach where a number of different clinics are operated in a single facility. The company generated revenue of JPY55 billion and EBITDA of JPY3.6 billion in the 2015 financial year.
J-Star noted that pharmacy industry has slowed due to reductions in government-set drug fees and competition from numerous other small-scale drug store chains. As such, it sees opportunities for consolidation. The private equity firm will also strengthen operations and management with a view to boosting revenue and streamlining costs.
In addition, a separate Aisei filing highlighted the possibility of synergies with existing J-Star portfolio companies in the healthcare space. For example, in 2014 the private equity firm acquired Nurse Call, which operates nursing care stations and a hospice facility for patients with cancer and other late-stage diseases.
J-Star is currently investing J-Star No.2 Investment, a JPY20.4 billion vehicle that reached a final close in 2013.
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