Sanpo-yoshi Communication

President's Column] Increasing M&A

Recently, we have seen an increase in the number of M&A referrals we receive from financial institutions and brokerage firms.

Not long ago, it was said that the number of companies wishing to sell was less than the number of companies wishing to acquire, and that for each transaction, there were many companies that raised their hands to buy, and the transfer price seemed to soar. In addition, there is a lack of successors to the company's management. In addition, the fact that the baby-boom generation of business owners, who have no successors, are now seriously considering business succession may also be having an impact.

We have taken on one company during my predecessor's time, two companies through stock transfers and two companies through business acquisitions since I became president, but it took 25 years for the first one to turn a profit in a single year, and none of them can be said to have been a clear success at this point.

I'm embarrassed to say that the biggest mistake we made was that the company we took over had our competitors as their main customers, so the moment we took over, they pulled one of our salespeople out, and we instantly lost 40% of our sales. This is what happened. Due in part to our company's lack of ability, we have not yet been able to completely fill the hole.

Other than that, [the contract was made on terms that were considerably unfavorable to the customer (price, inventory, payment, etc.)]. We are still struggling with "We did not have a monthly settlement of accounts, so we could not grasp the actual situation. We are still struggling with the following cases. As an example of another company in the same industry, "After the acquisition, the executives of the acquired company went out on their own with their employees and customers, and the company was left empty-handed. There was also a case in which an executive of the acquired company went out on his own with his employees and customers, leaving the acquired company in the dust.

To begin with, the acquiring company is at a disadvantage in M&A because the acquired company has by far the most information. We have heard of many other cases of failure.

However, not doing something because it is risky is not progress, and I believe that together with M&A specialists and other trusted partners, we can limit the risks through prior due diligence and written agreements. While learning from our mistakes, we will remain cautious and continue to consider the possibility.

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