Japan Systems was a subsidiary of DXC Technology and a JASDAQ listed public company prior to Longreach’s investment. The company is a system integrator and is engaged in three businesses. The Enterprise business provides system integration services to multiple sectors such as financial, telecom and energy. The Public sector business provides to municipalities its own proprietary accounting software, “FAST”, and related system engineering services. The NetCam Systems business provides its own proprietary (i) mammography viewer software and (ii) video management system software for network cameras.

Corporate Divestiture, Going Private, and Cross Cultural Solutions. Non-core subsidiary divestment from a US IT conglomerate, DXC Technology. The investment opportunity was developed exclusively, given Longreach’ global team capabilities and our track record in carve-outs as well as tender offer transactions, along with our track record in value creation with portfolio companies in the business service sector. 100% of voting rights are held by LRG while DXC co-invested 21% through a pension fund LP.

• Management upgrade including new CEO
• Corporate governance enhancement through committee-based organizational structure
• Revenue expansion and unit price improvement through various strategic initiatives
• Cost reduction opportunities through business process re-engineering and streamlining indirect costs
• Scale-up through aggressive acquisition of engineers and add-on M&A
• Product portfolio expansion through R&D and M&A
  

FCL Components (ex-Fujitsu Component) was a subsidiary of Fujitsu and a Tokyo Stock Exchange listed public company prior to our investment. The company is a global manufacturer of relays, resistive touch panels, thermal printers and other electronic devices. In particular, the company is positioned as one of the leading global relay suppliers in the automotive, factory automation, and communication/IoT areas. Production Facilities are at Nagano, Miyazaki, China and Malaysia.

Corporate Divestiture and Going Private. Non-core subsidiary divestment from an industrial conglomerate, Fujitsu. The transaction was originated based on the Longreach’s long term relationship and strategic dialogue with Fujitsu and FCL Components (ex-Fujitsu Component). Through a two-phase public tender offer process, 75% of voting rights are held by Longreach and 25% of voting rights are held by Fujitsu through debt-like preferred shares.

• Strategic capital enhancement: improve financial capacity for strategic investments in CAPEX and R&D
• Further growth in Relay Business: strategic capex particularly in high-voltage EV automotive relay, as well as expansion of overseas customer base
• Business portfolio optimization: strengthen core products focus, including withdrawal from a strategically unattractive businesses
• Cost structure and efficiencies restructuring program: significantly reducing revenue break-even point and improving profit margin through streamlining manufacturing facilities, reduction of SG&A expenses and improving the variable cost ratio
• Cash flow optimization: working capital optimization and enhanced capex control
• Corporate governance & management enhancement: appointment of new President, CFO and rebuilding the corporate governance structure

SANYO Electric Logistics (“SEL”) was originally established in 1971 as a subsidiary of SANYO Electric, to handle its logistics operations, and was a Tokyo Stock Exchange listed public company prior to Longreach’s investment. SEL evolved into a leading 3PL provider with a dominant position in providing logistics services to the large domestic electronic retail chains, focusing on providing comprehensive logistics solutions to customers through IT and leveraging its network/platform.  With asset heavy/labor intensive processes such as trucking outsourced, SEL operates an “Asset Light” model.

Corporate Divestiture and Going Private. After the strategic merger of SANYO and Panasonic, Panasonic decided to have SANYO divest SEL to Longreach, executed through a going-private tender offer process for the 42% public stake combined with the acquisition of SANYO Panasonic’s 58% control stake. SANYO Panasonic reinvested a 5% stake to support its continued business relationship with SEL.

• Significant growth through capturing the continuing outsourcing trend of logistics operations from major corporations (non-captive clients)
• Strategic focus on winning 3PL business contracts from large-scale consumer electric retailer chains (e.g. Yamada Denki) in Japan
• Place new CFO to significantly enhance and drive financial management, including

• ~KPIs and MIS dashboard
• ~Focus on cash flow creation

• Introduce new HR and compensation incentive plan directly linked to financial KPIs
• Strategically re-position SEL from a captive logistics servicer to a truly multi-customer global 3PL company

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Founded in September 1998, Cybird is a pioneer mobile content provider which successfully expanded into developing and delivering popular mobile game contents, mainly targeting a female user base, along with expansion via its commerce businesses into cosmetics and health food products.

Founder Succession and Going Private & Management Partnership. Going private through tender offer ("TOB") process and management partnership with the founder CEO. Longreach owned 91.9% while the founder CEO owned 8.1%.

• Founder and management had a proven track record. Longreach’s ownership and capital structure provided management with new flexibility to take greater advantage of unfolding strategic growth opportunities
• Opportunity to transform Cybird’s established business into a long term growth business by creating a new mobile advertisement business model as a platform business
• Stable cash flow from the existing mobile content and catalogue order business based on a high existing market share
• Cost competitive business structure and operations, achieved through implementation of cost efficiencies and tighter alignment of execution resources with strategic growth plan
• Improved financial management, budgeting and reporting systems implemented by new CFO recruited by Longreach