Recently, an article titled “Youngest Billionaire Emerges from Japan's M&A Market” has gone viral on social media. The article introduces Shunsaku Sagami, a young entrepreneur whose M&A brokerage firm, M&A Research Institute, has seen a meteoric rise in performance since its listing in Tokyo, catapulting Sagami, the largest shareholder, into billionaire status due to his stock holdings.
According to a survey by the renowned Japanese research company TDB, from 2018 to 2020, over 65% of Japanese businesses faced succession challenges. Even if a potential successor exists, high inheritance or gift taxes often prevent the transfer. Senior executives looking to take over the founder's business frequently lack the funds to buy out the founder's family shares, often leading to disputes.
The Succession Dilemma in Japan
Japanese companies, despite being operationally healthy, face closure and liquidation, which is regrettable and unfair to long-serving employees. Selling the business might be a viable solution. (The author notes that the situation is similar in Hong Kong, where companies might not hold the same value; however, industry consolidation using digitalization can generate value.)
The article details the success story of Shunsaku Sagami and his M&A Research Institute.
Success Factors of Shunsaku Sagami and M&A Research Institute
Flexible Use of Information Technology - Sagami emphasizes that the company has built one of the largest industry databases and collaborates with other firms to accumulate vast data on potential transaction targets and buyers. Using this data, the company developed an AI algorithm to match sellers and buyers, enhancing efficiency and accuracy. For instance, they successfully matched a fashion startup with an IT company, facilitating an M&A transaction.
Employment of M&A Talent and Legal Experts - The company plans to double its advisory team to 700 people by the end of September 2026. It employs a large number of in-house lawyers to provide various legal consulting services to clients, ensuring they feel "secure" throughout the M&A process, a crucial aspect of Japanese business culture.
Significant Cost Reduction - M&A Research Institute adopts a success-fee model, charging only the seller and discarding base fees or monthly fixed fees. This fee model means that their charges could be only half or even a third of those of other similar Japanese FA firms, especially when the target company has substantial debt.
Information Technology and AI Matching
Through the use of information technology and AI matching algorithms, M&A Research Institute can offer matching solutions beyond human imagination, such as pairing a fashion company with an IT company to address the fashion company's need to reduce personalization and shift to online marketing. This technology not only increases transaction success rates but also enhances customer satisfaction.
Comprehensive Support from a Professional Team
The company employs a large number of M&A consultants and legal experts, providing clients with one-stop services, resolving various queries, and boosting client trust and satisfaction.
Cost Advantage
By charging only the seller based on success fees and not on the total assets of the company, M&A Research Institute offers more competitive pricing, attracting more clients.
Conclusion
Shunsaku Sagami's success stems not only from choosing a rapidly growing sector but also from his flexible use of information technology, support from a professional team, and competitive fee model. These factors combined have enabled M&A Research Institute to stand out in Japan's M&A market, becoming an industry leader.
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