Winning deals
ESG Award
| Prize | ESG Award |
|---|---|
| Recognized Deal/Company | Sukesan Co., Ltd. |
| Fund | Unison Capital, Inc. |
| Reason for selection | ①Practical ESG initiatives by a middle market project Suksan Udon is a dining chain of udon restaurants from Kitakyushu City . In March 2018, Unison Capital ("Unison") invested in the company, making its exit in October 2024. At the time of investment, it was a highly local company, with all 39 of its stores being located in northern Kyushu. By the time of the exit, it had expanded to 72 stores throughout all of Kyushu and in the Chugoku and Kansai regions. It also expanded into the Kanto region, and its net sales had doubled since the time of investment. When Unison invested in Sukesan, it approached the management team with various ESG-related initiatives, but they tended towards being "ESG for ESG's sake," so they failed to gain a firm foothold. Unison therefore decided to involve the management and employees in implementing grounded and authentic ESG measures, led by a management philosophy that carried on the wishes of the company's founder. The primary driver of the company's corporate value growth was to become a company loved by the local community, even in locations where restaurants were newly opened, through both of the following: (1) improving the number of repeat customers and life-time value by serving everyday food and (2) hiring and retaining human resources capable of full-service, directly-managed shop operation. A new Purpose was formulated to reflect this, the company's human resource and labor systems were improved, various community contribution measures were implemented, jobs were created, and wages were improved, all while increasing productivity and significantly improving business results. ②Passing the baton on to a new owner that understands the company's philosophy In October 2024, Unison exited by selling the company to Skylark. Skylark didn't just present good terms for the deal, but is also preserving the company's organization and structure while collaborating with Sukesan to expand its store area in order to further grow the business, all led by a focus on Sukesan's human capital. When a PE fund makes its exit, return is paramount, but it is also important to sell the company to a buyer who understands and will honor the investment target's corporate value, including ESG perspectives. In that sense, as well, this project was highly evaluated as an investment that can serve as a future example for PE. |
EXIT Award
| Prize | EXIT Award |
|---|---|
| Recognized Deal/Company | Rigaku Holdings Corporation |
| Fund | Carlyle Japan LLC |
| Reason for selection | Led by its vision, "To Improve Our World by Powering New Perspectives," Rigaku Holdings uses its core technology of X-ray analysis in its semiconductor devices and analysis devices, which are sold throughout the world. 70% of its sales come from the global market. For almost 50 years, the company was led by its founder and president, but then he passed the baton to the Carlyle Group, saying that he wished for them to establish a system for developing the next generation, to push further forward with globalization, and to publicly list the company, turning it into one capable of sustainable growth. Carlyle lived up to this mandate from the previous company leader by systematically building a new management structure to free the company from its previous "one-man" style of leadership. It hired multiple executives, such as a CEO, a CFO, and a CHRO, from outside the company and combined them with the company's own management team. It turned Rigaku into a holdings company and changed the course of its management from focusing on Japan alone to also looking at the global market. These efforts proved fruitful and Rigaku's sales more than doubled from pre-Carlyle levels. Its EBITDA also grew steadily. The company was listed on the Tokyo Stock Exchange Prime Market three and a half years after the investment. This was one of the 10 biggest deals in the last decade, and the largest ever IPO for a private sector PE fund. We evaluated this project highly for several achievements, such as transforming the company from an owner-operator company to a publicly listed company, accelerating the global roll-out of products based on its technologies, and carrying out a major IPO. For these reasons, we have chosen this project for the EXIT Award. |
EXIT Award
| Prize | EXIT Award |
|---|---|
| Recognized Deal/Company | Oku Japan Co., Ltd. |
| Fund | Endeavour United Co., Ltd. |
| Reason for selection | ①Making it through the pandemic and turning the tables a)The worst possible timing for an investment project Oku Japan Co., Ltd. ("Oku Japan") plans, sells, and operates tours for foreign tourists visiting Japan. These include tours of the Kumano Kodo pilgrimage route and the Tsumago-juku post town along the Nakasendo route. Endeavour United Co., Ltd. ("Endeavour") purchased Oku Japan in April 2019. At the time, expectations were high that already-strong inbound tourism would increase even further. However, one year after the investment, in March 2020, the COVID-19 pandemic led to strict border control measures, and foreign tourists vanished from Japan. It was the worst possible timing for an investment project. b)The power of Endeavour, surviving the pandemic and planting the seeds of future growth Oku Japan's sales plummeted immediately following the implementation of border controls. Due to the cash burn rate, including the repayment of acquisition financing, the company soon began to struggle with finance depletion. Needless to say, it negotiated with financial institutions and took advantage of COVID relief measures offered by public agencies. Endeavour also took an active lead in maintaining and improving the motivation of employees and preventing valuable human capital from leaving the company. It planned and offered travel plans that were targeted at Japanese customers, without relying on inbound tourism. By implementing financing measures and promoting new business, it maintained the company's business base, and Oku Japan made it through these bleak times. c)Achieving a high investment multiple and exiting by selling to a business company With the end of the pandemic and the return of inbound tourists, Oku Japan's revenue made a rapid recovery. In December 2024, with solid future growth in sight, Endeavour exited by selling to Seibu Holdings Inc. In terms of both multiple of cost (MOC) and IRR, it outstripped even projects which had enjoyed steady sailing from the time of investment. During the investment period, the company's EBITDA had even dropped to a negative EBITDA, and yet five years after the investment the company had reached an unparalleled exit value. ②Local contributions, including contributions by fund members, were a major factor in the success of the exit One of the main reasons that this project was able to make it through the hard times of the pandemic and turn the tables to achieve great success were the steady contributions to the community by those involved, including fund members. The residents of Nakasendo route's Tsumago-juku post town, one of the highlights of the tours, had long-before made a commitment not to sell, rent out, or destroy the town's resources , and the bonds between the members of the community were strong. Oku Japan has earned the trust of the residents of Tsumago-juku, and this is believed to be the result of the steady and diligent efforts of those involved, including members of Endeavour, to benefit the community. This is an award-worthy example of the affinity that is possible between a PE fund that strives to innovate and a local community for which maintaining tradition comes first and foremost. |
Selection Panel
Member
Toshiko Oka
Professor
Meiji Business School -Graduate School of Global Business-
Meiji University
Member
Kazushige Kobayashi
Managing Director
MCP Asset Management Company Limited
Member
Kazuki Nakamoto
Partner
The University of Tokyo Edge Capital Partners Co., Ltd.
Member
Hideaki Fukazawa
Managing Director
Izukichi Company Limited