■Business Overview of Yamada Consulting Group <4792>

1. Company Overview

The group consists of the company and 19 subsidiaries (including 12 Overseas) and has 864 consultants (655 general consulting positions and 209 specialized consulting positions) as of the end of September 2024, making it one of the largest independent consulting firms in Japan. The Overseas subsidiaries number 12 (in Singapore, Indonesia, China, South Korea, Malaysia, UAE, Thailand, Vietnam, India, USA, Kaman) with personnel totaling around 250.

Pinnacle, which became a subsidiary in March 2024 (investment ratio 70%) *1 develops M&A advisory business both domestically and Overseas, particularly possessing advanced expertise and know-how in cross-border M&A projects. Additionally, Takenaka Partners, which became a wholly-owned subsidiary in April of that year *2, has been involved in M&A advisory services for Japanese companies in the USA for 35 years. The company signed a business partnership agreement in 2016 to support Japanese companies entering the North American market and has decided to expand its M&A advisory services and management consulting services in the North American market by acquiring it as a subsidiary. Each subsidiary has about 10 employees.

*1 Stock acquisition amount 658 million yen, goodwill 51 million yen, M&A costs 55 million yen.

*2 Stock acquisition amount 7.8 million USD, goodwill 4.7 million USD (7 years straight-line amortization), M&A costs 278 thousand USD.

2. History

In 1989, the Tokyo Financial Planners Co., Ltd. (now Yamada Consulting Group) was established in Bunkyo-ku, Tokyo, for the purpose of financial planner education, training, and consulting on financial planning. In 1995, the headquarters was relocated to Shinjuku-ku, Tokyo, and in 1997, TFP Venture Capital (renamed Yamada Business Consulting Co., Ltd., merged in 2018) was established to launch management, finance, and fundraising consulting business. In 2000, stocks were listed on the Osaka Securities Exchange Nasdaq Japan Market (now Tokyo Stock Exchange (hereinafter referred to as TSE) Standard Market). In 2010, the headquarters was moved to Chiyoda-ku, Tokyo, and the business name was changed to "Yamada Consulting Group." Additionally, in 2016, Spire Research and Consulting Pte Ltd., a local market research firm in Asia, was made a subsidiary, and the consulting business Overseas was started in earnest. In 2019, the company changed to the first section of TSE, and in April 2022, due to TSE restructuring, transitioned to the TSE Main Board.

3. Business Description

The company group provides one-stop Consulting Services from proposing solutions to management issues to implementation, collaborating through consultants in various business fields, and discloses its business segments as Consulting Business and Investment Business.

(1) Consulting Business

In the Consulting Business, services are developed in four business areas: management consulting, M&A advisory, business succession consulting, and A-REIT ETF consulting.

(a) Management Consulting Business

In the Management Consulting Business, to achieve the sustainable growth of companies, it consistently supports solving management issues from formulating management strategies to improving business processes in the "Sustainable Growth Area," provides one-stop solutions from IT strategy planning/conception, execution plans, execution support, to post-execution business establishment in the "IT Strategy & Digital Area," offers specialized and comprehensive solutions regarding organizational and human resource issues in the "Organization and Human Resources Area," and supports efforts in corporate governance aimed at sustainable growth and medium to long-term corporate value enhancement in the "Corporate Governance Area," as well as providing comprehensive support from building schemes for business revival to execution procedures in the "Business Revival Area" of consulting services.

Regarding customer acquisition channels, about 70% of the total comes from referrals from financial institutions such as megabanks and regional banks across the country, and the company's high service quality is recognized, allowing continuous acquisition of referral cases.

(b) M&A Advisory Business, Business Succession Consulting Business, A-REIT ETF Consulting Business

In the M&A Advisory business, about 70% of the revenue comes from Financial Advisory (FA) services, and the remaining approximately 30% comes from Brokerage services. The customer acquisition channel is predominantly direct orders, accounting for over 70%, while the rest comes from referrals from financial institutions, private equity funds, and legal and accounting firms. Additionally, the succession consulting business has a large proportion of referral cases from financial institutions and boasts abundant achievements. Although the revenue scale is relatively small, at just under 10% of the Consulting Services, a strong trust relationship is built with top executives, leading to many cases where this results in subsequent orders for management consulting and M&A advisory services, making this an important business for the company. In the A-REIT ETF consulting business, a wide range of services are provided, including investigation and analysis of real estate held by clients, proposals for effective use, and mediation for buying and renting.

(2) Investment Business

In the investment business, as one of the solutions to challenges such as capital policies and business succession of client companies, there is an unlisted stock investment business that invests in company shares, and a real estate business that invests in low liquidity real estate, which often tends to be avoided during succession to the next generation, such as land and shared interests. Both businesses have synergies with the Consulting Services and maintain a fundamental policy of investing only in carefully selected projects that do not compete with other companies.

(Written by FISCO guest analyst, Jo Sato)