We focus on control buyouts based in Japan and selectively Greater China. We focus across three sectors: Industrial and Technology, Consumer Related and Business Services. We specialize in deploying capital to deliver value creating solutions across investments involving Corporate Divestitures, Founder Succession, Going Private/Management Partnership, Cross-Cultural Solutions or Unlocking Growth.
Established in 2013, Shin Nihon Jusetsu Group (“SNJ”) is a leading company in the residential solar panel and battery storage business. SNJ sells, installs and maintains comprehensive residential solar and battery product solutions, including solar power generation systems and storage battery systems for residential use, as well as “smart house” facilities and accompanying housing renovation products and services. SNJ has expanded its own sales and installation networks nationwide in Japan and has a leading market share in solar power generation systems and storage battery systems.
Founder succession. Longreach acquired a majority stake in SNJ in May 2024 from Mr. Akihide Kaneda, the founder and sole shareholder of SNJ, who will retain a significant minority stake in the business and will continue as its Chairman.
J-CEP is a leading outsourcing staffing business group specialized in recruiting, training and deploying Construction Field Managers to construction sites in Japan. J-CEP operates with Aki-Japan and JAG Field as its core entities. J-CEP thereby provides high quality human resource solutions to address the structural labor shortage challenges facing the Japanese construction sector.
Unlocking Growth. Longreach acquired 100% of J-CEP through an exclusive transaction. The transaction was closed in July 2023.
The Company operates its main business under the brand name “Dr.stretch”, founded in 2010. Dr.stretch offers one-on-one assisted stretch services at its own or franchisees’ outlet studios. Dr.stretch is the pioneer and leader in the assisted stretch market in Japan, with dominant market share, and is the third largest stretch studio chain globally, with over 200 studios in Japan and globally including in Singapore, Taiwan, Malaysia, and the UAE, with further market entries underway.
Founder Succession, Unlocking Growth and Cross Cultural Solutions. Longreach acquired a majority interest in nobitel inc. by buying shares from Mr. Masahiro Kurokawa, the founder and CEO, and from minority shareholders, combined with acapital injection in the form of convertible preferred shares. The transaction was closed in August 2023.
Established in 2004, Blueship is an IT service company specializing in SaaS/PaaS solutions. Clients include public organizations and private enterprises where Blueship delivers digital transformation(“DX”), including as a SaaS solution provider via the ServiceNow platform.
Founder Succession. Longreach acquired 100% of Blueship from the founder and other minor shareholders, negotiated through a control buyout in April 2023. The transaction was a bolt-on acquisition for Japan Systems, enabled by LCP3 follow-on capital.
Established in 2006, Wellness Communications Corporation (“WCC”) is a leading healthcare software-as-a-service (“SaaS”) and outsourcing company in Japan. WCC offers two core and high customer demand growth services: health management system software mainly for large enterprises and medical checkup outsourcing services mainly for corporate health insurance associations.
Corporate Divestiture. Longreach acquired shares of WCC from ITOCHU Corporation (“ITOCHU”). The transaction was originated based on Longreach’s long-term relationship and strategic dialogue with ITOCHU and Wellness Communications. The transaction was closed in March 2023.
Established in 1994, Pokka Create is one of the leading operators of self-service coffee shop chains in Japan, with 201 stores (at the acquisition) mainly under the brand “CAFÉ de CRIÉ”. Integrating with C-United, which operates “Kohikan” and “Caffè Veloce” coffee chains, Pokka Create became part of C-United in January 2023.
Corporate Divestiture. Longreach acquired 100% of Pokka Create from Sapporo group through C-United, negotiated through a control buyout in April 2022, and executed as abolt-on acquisition.
APC Group (ex-Amazon Papyrus) is a leading specialty chemical and process solutions provider to the pulp, paper, water treatment, viscose fiber and barrier function applications in Asia. APC Group is headquartered in Hong Kong, with regional presence in over 14 countries in Asia, including Greater China, India, South-East Asia, Japan, and the Middle East, and with production facilities in Thailand, India and China.
Founder Succession. Longreach acquired a majority stake in APC Group in June 2021 from Navis Capital Partners, founders and management, with the founders and management retaining a significant minority stake.
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.
Established in 1965, Chat Noir Company (“Chat Noir”) is one of the leading coffee shop chains in Japan. Chat Noir is a well-known and positioned brand, operating more than 190 stores (at the acquisition) across Japan mainly under the brand “Caffè Veloce”, a self-service style café. Integrating with Kohikan, Chat Noir became C-United in April 2021.
Founder Succession. Longreach acquired 100% of Chat Noir from the founder family, negotiated through a control buyout in February 2020.
Quasar Engineering (“Quasar”) is a contract development and manufacturing organization (“CDMO”) for the medical device industry, servicing leading global OEMs such as Johnson & Johnson and Medtronic, specializing in the assembly of complex minimally invasive components and devices across therapeutic areas, with focus on the cardiology space. Quasar is headquartered in Hong Kong, with assembly facilities in China, Thailand, and Singapore and R&D resources in Israel.
Founder Succession. Longreach acquired a majority stake in Quasar in 2019 from the founding family, with the founders retaining a significant minority stake.
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.
Established in 1970, Kohikan is the second-largest full-service coffee shop business in Japan, with 277 stores (at the acquisition) and a strong brand profile nationwide. It operates under the Kohikan, Café di Espresso, Kohikan-Kura brands. Integrating with the Chat Noir Company, which operates the Caffe Veloce coffee chain, Kohikan became part of C-United in April 2021.
Corporate Divestiture. Longreach acquired 100% of Kohikan from UCC group, negotiated through a control buyout in May 2018.
NOC was established as a subsidiary of Olympus. NOC evolved into a one-stop BPO service provider with a business track record including over 700 companies since 1988. The Company provides a wide range of services including back-office services (general affairs, accounting, HR, payroll), IT services (infrastructure building, kitting), fulfillment and logistics, staffing and others. It has a well diversified blue-chip customer base including large Japan conglomerates, global firms, and government agencies, in addition to Olympus.
Corporate Divestiture. As a part of its business refocusing plan, Olympus decided to divest non-core businesses including its back-office support business and its camera business. Longreach negotiated the 100% acquisition of NOC in October 2016, being entrusted by Olympus with repositioning NOC for long term growth as an independent BPO service provider.
First Kitchen, a subsidiary of Suntory, operates and franchises a QSR chain in Japan providing hamburger, pasta, french-fries, salad and dessert. It operates approximately 130 directly owned and franchise stores in Japan.
Corporate Divestiture and Cross Cultural Solutions. Longreach acquired 100% of First Kitchen from Suntory together with becoming the sole Japan franchisee for Wendy’s, in combination to create the new “Wendy’s First Kitchen” QSR chain and growth strategy.
Primo specializes in the production and retail of semi-customized bridal jewelry, including engagement rings and wedding rings. At investment, the Company operated three brands, I-PRIMO, Lazare Diamond and SELEXIA, and has a total of 88 stores in Japan (76 stores), Taiwan (10 stores) and Hong Kong (2 stores). The Company has a strong presence in Japan, with the leading position in engagement and wedding ring sales, and has a track record of success in overseas expansion into Taiwan and Hong Kong.
Unlocking Growth. Longreach acquired a majority stake with the current management including the CEO reinvesting. Transaction was closed in January 2015.
Sol-Plus is engaged in plastic injection parts production business with strong operational capabilities in design, tooling, manufacturing metal molds, and in volume production of plastic parts using in-house metal molds, with products mainly used in car electronics products and other auto parts, as well as in consumer applications. Sol-Plus has an established low cost manufacturing base in Thailand and is well positioned for further growth through its longterm partnerships with its key clients serving Toyota, Honda, Nissan, BMW in this strategically important growth region.
Corporate Divestiture. The 100% owner of Sol-Plus, ARRK Corporation, decided to focus on its mold and prototype business world-wide, whereby Sol-Plus became non-core for ARRK. Longreach acquired 100% of Sol-Plus, negotiated through a control buyout in January 2014.
Formerly a subsidiary of Hitachi, Via Mechanics (“VIA”) is a global leader in manufacturing micro-drilling machines for printed circuit boards (“PCBs”) and semiconductor packages, used mainly for data center server computers, automotive electronics components and smartphones. Products include spindle micro-drilling machines, laser micro-drilling machines, and exposure machines, mainly sold to manufacturers of PCBs and semiconductor packages. Leveraging leading optical technology and machine performance, VIA maintains leading market share globally.
Corporate Divestiture. VIA was determined by Hitachi to be a strategic divestment. Longreach acquired 100% of VIA through a negotiated control buyout with Hitachi providing seller financing to show its support for the transaction. The deal was proprietary, originated through Longreach’s long-term senior relationship with Hitachi, enabling multi-year strategic dialogue and proposals leading to agreement on the divesture.
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.
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%.
NIWS was founded in 1992 as a joint venture between Nomura Research Institute and IBM Japan, becoming an independent firm through its Tokyo Stock Exchange IPO in 2002. The Dealer business focused on distribution and deployment of IBM servers and software, primarily to the financial sector in Japan, and was a stable cash flow business. The Service business was an Application Service Provider (“ASP”), providing regional banks and hospitals with a turn-key service. It was loss making with excessive capital expenditure and limited client wins.
Distressed Investment. In 2007, NIWS was required to record large one-time losses for asset write-offs in its medical and financial ASP business. NIWS sought JPY 20bn in new sponsor equity combined with continuous support from its lending banks. Longreach and Phoenix Capital formed a consortium to inject this equity at a 70% discount to the then market price, combined with over two thirds of voting rights, as a control investment. The lending banks extended their loans of JPY 40bn for 5 years, and in addition BTMU committed a Debt for Equity Swap (“DES”)
Established in 1992 and listed on the Taiwan Stock Exchange, EnTie Commercial Bank (“EnTie”) is a strongly capitalized and performing mid-size commercial bank in Taiwan, with a balanced business portfolio and a fast-growing retail/ wealth management franchise. EnTie has a network of 50 branches across Taiwan, among which 30 branches are in the Greater Taipei Area, and US$11 bn in assets.
Founder Succession. Longreach acquired a controlling stake in EnTie in November 2007 from the founding family through a privately negotiated transaction, with the family remaining as a significant minority shareholder. Longreach also brought in leading global financial institutions LPs as co-investors.
At the time of investment Asia Aluminum Group (“AAG”) was a leading middle stream aluminum processing company in Asia, with a product portfolio comprised mainly of higher value-added products, and with reliable and cost-efficient supply to large scale infrastructure and construction projects as well as industrial and consumer applications in Greater China and worldwide.
Minority growth investment in China. Longreach invested jointly with ORIX Corporation in May 2007 to acquire a strategic equity interest in AAG, in a proprietary structured deal with capital protection mechanism at an attractive valuation. A follow-on bridge loan investment was made in 2009 and subsequently repaid.
OCC manufactures submarine optical cables, onshore communication cables and marine communications equipment. The submarine business is large scale project drive with only three major players globally: Tyco, Alcatel, and OCC. The onshore cable business is stable with major clients including NTT, KDDI, NEC, railway companies, and government agencies.
Unlocking Growth. 100% buyout from a Japan Government Fund (IRCJ). After large capital expenditures funded by high leverage in the late 1990’s, OCC was hit by the global slowdown of telecom network investments from early 2000. OCC subsequently was rescued by the Japanese Government controlled IRCJ, as its temporary owner. The IRCJ selected Longreach as the sponsor to acquire and drive the resurgence of OCC. Longreach executed the acquisition of OCC on an exclusive basis, as a 100% control buyout in September 2006.
Founded as a joint venture between McDonald’s Corporation and Den Fujita in 1971. Japan’s largest fast food restaurant chain with JPY 395 bn of revenues and over 3,700 stores, publicly listed at c. JPY 300bn market cap in July 2005, when business restructuring was in process under the new CEO to improve low growth and margins. Then owned by the McDonald’s Corporation (49.99%), Fujita family (26.91%) and public shareholders (23.10%).
Founder Succession and Cross Cultural Solutions. Fujita family seeking exit but their shares represented 18 months trading volume - highly illiquid stock with high valuation. McDonald’s Corporation wished to facilitate the Fujita exit while keeping the McDonald’s Japan turnaround focus on track. Control buyout impossible given McDonald’s strategic shareholding requirement, and vanilla equity investment impossible given high valuation and lack of liquidity. Through exclusive negotiations with McDonald’s and the Fujita family, Longreach developed a unique structured minority investment approach that solved for the deal constraints and generated high returns, enabling the investment in July 2005.
Established in 2004, Blueship is an IT service company specializing in SaaS/PaaS solutions. Clients include public organizations and private enterprises where Blueship delivers digital transformation(“DX”), including as a SaaS solution provider via the ServiceNow platform.
Founder Succession. Longreach acquired 100% of Blueship from the founder and other minor shareholders, negotiated through a control buyout in April 2023. The transaction was a bolt-on acquisition for Japan Systems, enabled by LCP3 follow-on capital.
Established in 2006, Wellness Communications Corporation (“WCC”) is a leading healthcare software-as-a-service (“SaaS”) and outsourcing company in Japan. WCC offers two core and high customer demand growth services: health management system software mainly for large enterprises and medical checkup outsourcing services mainly for corporate health insurance associations.
Corporate Divestiture. Longreach acquired shares of WCC from ITOCHU Corporation (“ITOCHU”). The transaction was originated based on Longreach’s long-term relationship and strategic dialogue with ITOCHU and Wellness Communications. The transaction was closed in March 2023.
Established in 1994, Pokka Create is one of the leading operators of self-service coffee shop chains in Japan, with 201 stores (at the acquisition) mainly under the brand “CAFÉ de CRIÉ”. Integrating with C-United, which operates “Kohikan” and “Caffè Veloce” coffee chains, Pokka Create became part of C-United in January 2023.
Corporate Divestiture. Longreach acquired 100% of Pokka Create from Sapporo group through C-United, negotiated through a control buyout in April 2022, and executed as abolt-on acquisition.
APC Group (ex-Amazon Papyrus) is a leading specialty chemical and process solutions provider to the pulp, paper, water treatment, viscose fiber and barrier function applications in Asia. APC Group is headquartered in Hong Kong, with regional presence in over 14 countries in Asia, including Greater China, India, South-East Asia, Japan, and the Middle East, and with production facilities in Thailand, India and China.
Founder Succession. Longreach acquired a majority stake in APC Group in June 2021 from Navis Capital Partners, founders and management, with the founders and management retaining a significant minority stake.
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.
Established in 1965, Chat Noir Company (“Chat Noir”) is one of the leading coffee shop chains in Japan. Chat Noir is a well-known and positioned brand, operating more than 190 stores (at the acquisition) across Japan mainly under the brand “Caffè Veloce”, a self-service style café. Integrating with Kohikan, Chat Noir became C-United in April 2021.
Founder Succession. Longreach acquired 100% of Chat Noir from the founder family, negotiated through a control buyout in February 2020.
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.
Established in 1970, Kohikan is the second-largest full-service coffee shop business in Japan, with 277 stores (at the acquisition) and a strong brand profile nationwide. It operates under the Kohikan, Café di Espresso, Kohikan-Kura brands. Integrating with the Chat Noir Company, which operates the Caffe Veloce coffee chain, Kohikan became part of C-United in April 2021.
Corporate Divestiture. Longreach acquired 100% of Kohikan from UCC group, negotiated through a control buyout in May 2018.
First Kitchen, a subsidiary of Suntory, operates and franchises a QSR chain in Japan providing hamburger, pasta, french-fries, salad and dessert. It operates approximately 130 directly owned and franchise stores in Japan.
Corporate Divestiture and Cross Cultural Solutions. Longreach acquired 100% of First Kitchen from Suntory together with becoming the sole Japan franchisee for Wendy’s, in combination to create the new “Wendy’s First Kitchen” QSR chain and growth strategy.
Established in 1992 and listed on the Taiwan Stock Exchange, EnTie Commercial Bank (“EnTie”) is a strongly capitalized and performing mid-size commercial bank in Taiwan, with a balanced business portfolio and a fast-growing retail/ wealth management franchise. EnTie has a network of 50 branches across Taiwan, among which 30 branches are in the Greater Taipei Area, and US$11 bn in assets.
Founder Succession. Longreach acquired a controlling stake in EnTie in November 2007 from the founding family through a privately negotiated transaction, with the family remaining as a significant minority shareholder. Longreach also brought in leading global financial institutions LPs as co-investors.
Quasar Engineering (“Quasar”) is a contract development and manufacturing organization (“CDMO”) for the medical device industry, servicing leading global OEMs such as Johnson & Johnson and Medtronic, specializing in the assembly of complex minimally invasive components and devices across therapeutic areas, with focus on the cardiology space. Quasar is headquartered in Hong Kong, with assembly facilities in China, Thailand, and Singapore and R&D resources in Israel.
Founder Succession. Longreach acquired a majority stake in Quasar in 2019 from the founding family, with the founders retaining a significant minority stake.
NOC was established as a subsidiary of Olympus. NOC evolved into a one-stop BPO service provider with a business track record including over 700 companies since 1988. The Company provides a wide range of services including back-office services (general affairs, accounting, HR, payroll), IT services (infrastructure building, kitting), fulfillment and logistics, staffing and others. It has a well diversified blue-chip customer base including large Japan conglomerates, global firms, and government agencies, in addition to Olympus.
Corporate Divestiture. As a part of its business refocusing plan, Olympus decided to divest non-core businesses including its back-office support business and its camera business. Longreach negotiated the 100% acquisition of NOC in October 2016, being entrusted by Olympus with repositioning NOC for long term growth as an independent BPO service provider.
Primo specializes in the production and retail of semi-customized bridal jewelry, including engagement rings and wedding rings. At investment, the Company operated three brands, I-PRIMO, Lazare Diamond and SELEXIA, and has a total of 88 stores in Japan (76 stores), Taiwan (10 stores) and Hong Kong (2 stores). The Company has a strong presence in Japan, with the leading position in engagement and wedding ring sales, and has a track record of success in overseas expansion into Taiwan and Hong Kong.
Unlocking Growth. Longreach acquired a majority stake with the current management including the CEO reinvesting. Transaction was closed in January 2015.
Sol-Plus is engaged in plastic injection parts production business with strong operational capabilities in design, tooling, manufacturing metal molds, and in volume production of plastic parts using in-house metal molds, with products mainly used in car electronics products and other auto parts, as well as in consumer applications. Sol-Plus has an established low cost manufacturing base in Thailand and is well positioned for further growth through its longterm partnerships with its key clients serving Toyota, Honda, Nissan, BMW in this strategically important growth region.
Corporate Divestiture. The 100% owner of Sol-Plus, ARRK Corporation, decided to focus on its mold and prototype business world-wide, whereby Sol-Plus became non-core for ARRK. Longreach acquired 100% of Sol-Plus, negotiated through a control buyout in January 2014.
Formerly a subsidiary of Hitachi, Via Mechanics (“VIA”) is a global leader in manufacturing micro-drilling machines for printed circuit boards (“PCBs”) and semiconductor packages, used mainly for data center server computers, automotive electronics components and smartphones. Products include spindle micro-drilling machines, laser micro-drilling machines, and exposure machines, mainly sold to manufacturers of PCBs and semiconductor packages. Leveraging leading optical technology and machine performance, VIA maintains leading market share globally.
Corporate Divestiture. VIA was determined by Hitachi to be a strategic divestment. Longreach acquired 100% of VIA through a negotiated control buyout with Hitachi providing seller financing to show its support for the transaction. The deal was proprietary, originated through Longreach’s long-term senior relationship with Hitachi, enabling multi-year strategic dialogue and proposals leading to agreement on the divesture.
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.
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%.
NIWS was founded in 1992 as a joint venture between Nomura Research Institute and IBM Japan, becoming an independent firm through its Tokyo Stock Exchange IPO in 2002. The Dealer business focused on distribution and deployment of IBM servers and software, primarily to the financial sector in Japan, and was a stable cash flow business. The Service business was an Application Service Provider (“ASP”), providing regional banks and hospitals with a turn-key service. It was loss making with excessive capital expenditure and limited client wins.
Distressed Investment. In 2007, NIWS was required to record large one-time losses for asset write-offs in its medical and financial ASP business. NIWS sought JPY 20bn in new sponsor equity combined with continuous support from its lending banks. Longreach and Phoenix Capital formed a consortium to inject this equity at a 70% discount to the then market price, combined with over two thirds of voting rights, as a control investment. The lending banks extended their loans of JPY 40bn for 5 years, and in addition BTMU committed a Debt for Equity Swap (“DES”)
At the time of investment Asia Aluminum Group (“AAG”) was a leading middle stream aluminum processing company in Asia, with a product portfolio comprised mainly of higher value-added products, and with reliable and cost-efficient supply to large scale infrastructure and construction projects as well as industrial and consumer applications in Greater China and worldwide.
Minority growth investment in China. Longreach invested jointly with ORIX Corporation in May 2007 to acquire a strategic equity interest in AAG, in a proprietary structured deal with capital protection mechanism at an attractive valuation. A follow-on bridge loan investment was made in 2009 and subsequently repaid.
OCC manufactures submarine optical cables, onshore communication cables and marine communications equipment. The submarine business is large scale project drive with only three major players globally: Tyco, Alcatel, and OCC. The onshore cable business is stable with major clients including NTT, KDDI, NEC, railway companies, and government agencies.
Unlocking Growth. 100% buyout from a Japan Government Fund (IRCJ). After large capital expenditures funded by high leverage in the late 1990’s, OCC was hit by the global slowdown of telecom network investments from early 2000. OCC subsequently was rescued by the Japanese Government controlled IRCJ, as its temporary owner. The IRCJ selected Longreach as the sponsor to acquire and drive the resurgence of OCC. Longreach executed the acquisition of OCC on an exclusive basis, as a 100% control buyout in September 2006.
Founded as a joint venture between McDonald’s Corporation and Den Fujita in 1971. Japan’s largest fast food restaurant chain with JPY 395 bn of revenues and over 3,700 stores, publicly listed at c. JPY 300bn market cap in July 2005, when business restructuring was in process under the new CEO to improve low growth and margins. Then owned by the McDonald’s Corporation (49.99%), Fujita family (26.91%) and public shareholders (23.10%).
Founder Succession and Cross Cultural Solutions. Fujita family seeking exit but their shares represented 18 months trading volume - highly illiquid stock with high valuation. McDonald’s Corporation wished to facilitate the Fujita exit while keeping the McDonald’s Japan turnaround focus on track. Control buyout impossible given McDonald’s strategic shareholding requirement, and vanilla equity investment impossible given high valuation and lack of liquidity. Through exclusive negotiations with McDonald’s and the Fujita family, Longreach developed a unique structured minority investment approach that solved for the deal constraints and generated high returns, enabling the investment in July 2005.
