Japan’s Advantage Partners and healthcare-focused LYFE Capital have jointly launched a 94.8 billion yen ($635 million) tender offer to delist one of the country’s largest dispensing pharmaceutical businesses, Nihon Chouzai, from the Tokyo Stock Exchange.
The offer, extended via the newly formed entity AP86, values the pharmacy chain operator at 3,927 yen ($26.22) per share, representing a 163.6% premium over its closing price before media reports emerged in April, according to a Thursday filing. Nihon Chouzai’s board has unanimously endorsed the deal, urging shareholders to tender their shares.
Advantage Partners plans to control 51% of the buyout vehicle via its seventh fund, while LYFE Capital will hold 49% through its fourth fund, underscoring sponsor interests for the country’s healthcare sector.
Founded in 1980 by the Mitsuhara family, Nihon Chouzai operates over 760 dispensing pharmacies across Japan. It also runs pharmaceutical manufacturing and staffing businesses, which the buyers see as ripe for value creation through operational synergies, M&A, and international expansion, per the filings.
The Mitsuhara family, which controls over 42% of Nihon Chouzai shares directly and another 19.5% via Max Planning, has agreed to tender all directly held shares. Max Planning will remain a shareholder during the tender but will be absorbed via a structured merger following the transaction.
In total, the buyers aim to acquire at least 14 million shares, or 46.95% of the outstanding float, to trigger a full squeeze-out and privatisation process from the TSE.
The 3,927 yen per share offer price is well above the pre-rumour average of 1,490 yen and even exceeds the company’s recent high of 3,600 yen. The price falls within and often above third-party fairness valuation ranges, according to reports by Yamada Consulting and Plutus Consulting. The board cited these, along with a competitive multi-round bidding process, in supporting the offer, per the filings.
The new buyers have secured financing of up to 96 billion yen ($640 million) from domestic lenders and will receive equity injections from both Advantage and LYFE Capital. Subordinated loans will be provided by ACA Investments, which is now known as Felicity Global Capital.
The tender offer period is expected to last from August 1 to September 16. If successful, Nihon Chouzai will join a growing list of Japanese healthcare firms that have gone private, as investors look to capitalise on the country’s ageing population and drug innovations.
Investments in Japan’s healthcare sector have grown at 20% annually since 2019, driven by improved corporate governance and changes to the M&A code, which have opened up more opportunities for carve-outs and privatisations, according to Bain.
Japan’s overall buyout and growth equity deals have outperformed globally, delivering a 3x multiple on invested capital—the highest among major regions between 2010 and 2024, according to Bain data. Despite a smaller deal volume, Japan beat the US (2.4x), Europe (2.1x), and China (2.1x), signalling market maturity for one of the world’s largest economies. With $13 billion, Japan was among the few countries last year that were able to reach the exit record it made in the peak dealmaking year of 2021.
