We—Nihon PMI Partners, Japan’s only sector-specialized healthcare buyout fund—support companies alongside healthcare experts, including MDs.

Starting this time, we will introduce actual investment cases. The first case is Long Life Holdings, Japan’s first publicly listed company in the caregiving industry.

【Company Overview】
Long Life Holdings is a company that provides multifaceted senior services through its group operations, including nursing home management, home care services, and resorts.

  • Core Businesses: Home-visit care and luxury paid nursing homes for affluent seniors
  • Business Area: Kansai region
  • Revenue: Approx. ¥12.5 billion (fiscal year ending October 2022) , Numbers of Employees: Approx. 2,400
  • Group Companies: Japan Long Life Co., Ltd. (luxury nursing homes), LCare Co., Ltd. (home-visit care), Long Life Resort Co., Ltd. (resorts)
  • History
    ◦ Operating profit margin remained stable at 3-5% until the mid-2010s
    ◦ Since 2015, profitability and financial stability deteriorated due to aggressive investment, increased borrowing, and declines in residents/members during the COVID-19 pandemic
  • Competitive Environment
    ◦ Following the introduction of the Long-Term Care Insurance System (2000), competition intensified with major players (SOMPO, Gakken, etc.) entering the market. The company struggled to establish a clear winning strategy.

【Reasons for Investment】

  • First, it had established a unique position backed by regional trust and brand strength, demonstrating robust business fundamentals.
  • Second, its Value Creation strategy was clearly defined.
    ◦ Even before deal closing, we designed the PMI, anticipating potential for enhancing equity value through revenue growth and balance sheet optimization (disposition of non-core assets), as well as an increase in future acquisition inquiries.
  • Third, by leveraging our network for a private placement, we judged we could contain the tender offer premium to 21.6% (compared to the 2022 market average of approximately 43%) and enhance the certainty of returns.

【Challenges and Resolution Strategy for the Investee Company】

  • Financial Instability
    ◦ Initiate PMI before investment and strengthen financial foundations through refinancing and other measures
  • Optimization of Business Portfolio
    ◦ Achieve optimal allocation of management resources through selection and concentration of business activities and service areas
  • Personnel Dependency and Operational Inefficiencies
    ◦ Hands-on involvement at the field level to enhance operations centered on DX and data utilization
    ◦ Supporting the acquisition of additional fees for standardized support in home-visiting caregiving.
    ◦ Balancing profitability and growth potential.

【Actual Returns (Progress)】
We are achieving robust growth through operational improvements and financial stabilization, and we also anticipate upside potential as we move toward an exit. Details of these results will be shared with our investors in due course.