Company Overview
1. Company Overview
Mitsui Matsushima Holdings Co., Ltd. <1518> was established in Nagasaki Prefecture as Matsushima Coal Mine Co., Ltd. in 1913 and has a history of 110 years since its founding in 2023. Since its establishment, the company has developed and operated Matsushima Coal Mine, Oshima Coal Mine, and Ikejima Coal Mine in succession, and in 1991 it participated in a joint venture with Liddell Coal Mine in NSW (New South Wales) through Mitsui Matsushima Australia PTY. LTD.
Although Mitsui Matsushima has continued its coal-related business, its core business for over 100 years, the mining area licensed and approved by the state government for the Liddell Coal Mine in NSW, where it owned a 32.5% stake, is scheduled to cease mining at the end of the fiscal year ending March 2024. As a result, the coal-related business will also end by the end of the fiscal year ending March 2024. Prior to the discontinuation of the coal-related business, the company has been promoting a portfolio reorganization of its business and the establishment of a revenue base that is not dependent on coal-related business, due to the growing awareness of environmental conservation on a global scale and the expected arrival of a full-fledged decarbonized society. In 2013, after Mr. Yoichi Yoshioka, the current President and CEO, joined the company, he established an internal financial advisor team and has been steadily executing new M&A investments. Starting with Nippon Straw Co., Ltd. in February 2014, the company has since acquired 12 subsidiaries, including Hanabishi Sewing Co., Ltd. (now Hanabishi Co., Ltd.) in October 2015, Clean Surface Technology Co., Ltd. (now CST Co., Ltd.), which changed its name in April 2023, in February 2017, Meiko Shokai in April 2019, KeiEmTei Co., Ltd. and Sansei Electronics Co., Ltd. in April 2020, System Technology Co., Ltd. in February 2021, Japan Catan in May 2022, Marubeni Office Supply Co., Ltd. (now MOS), Plus One Techno Co., Ltd. in August 2023, Japan Chain Holdings Co., Ltd. in December 2023, and Saunders & Associates (subsidiarized via Sansei Electronics Co., Ltd.) in January 2024. In 2018, it shifted to a pure holding company structure and changed its name to the current Mitsui Matsushima Holdings Co., Ltd.
2. Characteristics of M&A Strategy
Mr. Yoshioka has consistently built his career at financial institutions. He initially joined GCA, Ltd. (now Houlihan Lokey, Ltd.) in 2007 as an M&A advisor and formed a relationship with the company in that capacity, which led to his later joining. By being directly involved in the case from the early stages of due diligence (DD) and making decisions about acquisitions, Yoshioka has made it possible to carry out certain and rapid M&A.
(1) Investment Policy
The company's M&A policy is "stable revenue, niche markets, and clarity," and it executes M&As based on unwavering investment axes. It targets companies that operate in niche markets where demand trends in the future are determined based on market conditions, and companies that own unique technologies and have a high market share.
(2) Establishment of M&A Promotion Structure
The company has an internal financial advisor (FA) team composed of financial industry veterans with a wealth of experience in M&A, and it can efficiently aggregate and share information through a wide network of M&A agents and investment funds it has acquired through its many years of experience. By internally developing the FA team, it is less likely that investment criteria will deviate, and rapid decision-making, expertise accumulation, and astuteness are improved, making it possible to identify cases that match the investment policy. On the other hand, by having Mr. Yoshioka lead the FA team as an M&A specialist, it is possible to promote prompt case review and collaboration with the field to avoid missing opportunities. By handling DD and valuation under its own management, it has established a strong commitment to realizing the expected returns after M&A.
(3) Acquisition at fair prices
The company is running M&A at fair prices. By accumulating M&A achievements and improving its reputation, the number of referrals from sourcing channels (banks, securities companies, M&A intermediaries, investment funds, corporate and individual shareholders, etc.) has increased. However, it makes it possible to achieve acquisitions at fair prices by avoiding bid cases and conducting M&A. In the case of referral opportunities, we believe that there is also the advantage of being able to quickly enter DD because the span from submission of the acquisition intention document to the decision of the buyer company is short, and maximizing cash flow after acquisition.
(4) Hands-on PMI and cost synergy by in-house talent.
After acquisition, we utilize the know-how of hands-on PMI※1 by in-house talent. For example, management support such as dispatching the same company's personnel to group companies, cost reduction by sharing technology and know-how between group companies, development of new products by personnel exchange, and supply of components between group companies. PMI know-how, efficient use of management resources, and synergy among the group are also being accumulated, and the entire group is creating conglomerate premiums. In addition, while the lifestyle-related business is steadily growing※2, the number of employees is not increasing, and the efficient use of management resources is being realized.
※1 Post Merger Integration, the integration process after acquisition.
※2 EBITDA of the lifestyle-related business has expanded from 2.4 billion yen in the fiscal year ending March 2018 to 5.1 billion yen in the fiscal year ending March 2023.
(Written by FISCO Guest Analyst Yoichiro Shimizu)