J-Star completes buyout of Japan's Aisei Pharmacy
J-Star has completed its takeover of Japanese drugstore chain Aisei Pharmacy in a deal valued at JPY11.4 billion ($101 million).
The deal is in line with the firm's offer in February of JPY5,300 per share for the company's 2.38 million shares, a premium to the JPY5,250 price at the close of trading on March 23. J-Star made its purchase through Aisei Holdings, a special-purpose vehicle controlled by its J-Star No. 2 Investment fund, which closed at JPY20.4 billion in 2013. Additional support for the deal was provided by MCo Corporation and Mizuho Bank.
Aisei has over 300 stores across Japan and follows a mall-style approach where a number of different clinics are operated in a single facility. The company reported revenue of JPY55 billion and EBITDA of JPY3.6 billion in the 2015 financial year.
J-Star's takeover offer followed slowing growth in Japan's pharmacy industry due to government-ordered reductions in drug fees and competition among various small-scale drug store chains. The firm believes this situation presents Aisei with opportunities for consolidation.
Along with inorganic growth opportunities, J-Star will strengthen operations and management in order to reduce costs and boost revenue. Aisei has also indicated that it sees possibilities for synergies with existing J-Star healthcare portfolio companies such as nursing station and hospice facility operator Nurse Call, which the firm acquired in 2014.
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