J-Star makes second healthcare acquisition

The acquisition was facilitated by financing from Aozora bank.

HCM has said that its new shareholder structure will enhance its senior citizen-related services. J-Star will send two members to the board member of HCM.

This is J-Star's second healthcare investment, after investing in Apo Plus last September. J-Star has recently ramped up its focus on opportunities in healthcare given the sector's growth expectation in the coming years, paralleling the country's rising elderly population. This is juxtaposed with a declining birth rate that is one of the lowest in the world.

Gregory Hara, Director and President of J-Star, told AVCJ that, in light of the industry's expansion, HCM represented an appealing opportunity because the company has been projecting a solid cash-flow. He noted that the HCM's well-run business operations have enabled the company to grow organically as opposed to expanding via M&A. However, Hara said that acquiring other similar business operators is one of the options the company may employ to progress its service areas nationwide. Those acquisitions are slated to be made with its available cash flow.

"The business has a good growth opportunity with high return, so we have also planned for alternative expansion plans as well as risk hedges because we think that the government may change the domestic health insurance policy possibly in 2015," Hara said.

HCM was founded in 2002 by Akitoshi Yamazaki, whose experience in the healthcare industry has included a role at Goodwill Co. He was once dubbed as one of the most successful personal agents in the healthcare industry for senior citizens after developing business operational strategies on that market for such firms such as Sumitomo Corporation, McKinsey & Company and the Disney Store.

After the business' incorporation, HCM has gradually expanded its service operations to include 62 in-home operational bases, and owns a nursing care facility. It overall claims to serve more than one million people. Its core business is comprised of three pillars: ‘Amica,' which provides in-home care; ‘Amica Villa,' which offers nursing home services; and ‘Aiuto,' which provides housekeeping services. Its in-home health care has seen increasing demand in Japan due to shortage of hospital beds, while the number of doctors are also said to be insufficient to support the country's aging society.

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• Topics
• North Asia
• Buyouts
• Healthcare
• Japan Asia Investment