Established in 2006, Wellness Communications Corporation (“WCC”) is a leading healthcare software-as-a-service (“SaaS”) and outsourcing company in Japan. WCC offers two core and high customer demand growth services: health management system software mainly for large enterprises and medical checkup outsourcing services mainly for corporate health insurance associations.

Corporate Divestiture. Longreach acquired shares of WCC from ITOCHU Corporation (“ITOCHU”). The transaction was originated based on Longreach’s long-term relationship and strategic dialogue with ITOCHU and Wellness Communications. The transaction was closed in March 2023.

• Accelerating growth of existing businesses through strengthening sales and marketing functions, with bolt-on M&A also possible
• Expanding target customers to small to mid-sized enterprises market with new simplified SaaS product and service package
• Expanding business domain to providing health support solutions, including health guidance, severe illness prevention, etc. for enterprises andtheir employees by leveraging WCC’s SaaS platform and accumulated health data, and through launching proprietary services, business alliance, and M&A
• Improvement in operational efficiency of process centers through digital transformation, etc.
• Enhancement of corporate governance, including new KPIs and performance aligned HR evaluation/compensation
• Execution support for successful IPO

Established in 1994, Pokka Create is one of the leading operators of self-service coffee shop chains in Japan, with 201 stores (at the acquisition) mainly under the brand “CAFÉ de CRIÉ”. Integrating with C-United, which operates “Kohikan” and “Caffè Veloce” coffee chains, Pokka Create became part of C-United in January 2023.

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Corporate Divestiture. Longreach acquired 100% of Pokka Create from Sapporo group through C-United, negotiated through a control buyout in April 2022, and executed as abolt-on acquisition.

• Create scale and synergies by integrating with C-United
• ~Enhancement of management structure and organizational functions, fully integrated into C-United
• ~Improvement of store profitability by mutual sharing of know-how, including store operations, menus, and marketing
• ~Improvement of customer experience and operational efficiency by leveraging C-United’s digital platform
• ~Optimization of procurement and logistics by expansion of business scale
• ~Optimized execution of store openings by mutual sharing of resources and know-how of store openings and franchise owner networks
• Accelerating business expansion, including brand and store renewal, and new direct and franchise store openings, by deploying new management resources
• Enhancement of corporate governance, including new KPIs and performance aligned HR evaluation/compensation

Japan Systems was a subsidiary of DXC Technology and a JASDAQ listed public company prior to Longreach’s investment. The company is a system integrator and is engaged in three businesses. The Enterprise business provides system integration services to multiple sectors such as financial, telecom and energy. The Public sector business provides to municipalities its own proprietary accounting software, “FAST”, and related system engineering services. The NetCam Systems business provides its own proprietary (i) mammography viewer software and (ii) video management system software for network cameras.

Corporate Divestiture, Going Private, and Cross Cultural Solutions. Non-core subsidiary divestment from a US IT conglomerate, DXC Technology. The investment opportunity was developed exclusively, given Longreach’ global team capabilities and our track record in carve-outs as well as tender offer transactions, along with our track record in value creation with portfolio companies in the business service sector. 100% of voting rights are held by LRG while DXC co-invested 21% through a pension fund LP.

• Management upgrade including new CEO
• Corporate governance enhancement through committee-based organizational structure
• Revenue expansion and unit price improvement through various strategic initiatives
• Cost reduction opportunities through business process re-engineering and streamlining indirect costs
• Scale-up through aggressive acquisition of engineers and add-on M&A
• Product portfolio expansion through R&D and M&A
  

FCL Components (ex-Fujitsu Component) was a subsidiary of Fujitsu and a Tokyo Stock Exchange listed public company prior to our investment. The company is a global manufacturer of relays, resistive touch panels, thermal printers and other electronic devices. In particular, the company is positioned as one of the leading global relay suppliers in the automotive, factory automation, and communication/IoT areas. Production Facilities are at Nagano, Miyazaki, China and Malaysia.

Corporate Divestiture and Going Private. Non-core subsidiary divestment from an industrial conglomerate, Fujitsu. The transaction was originated based on the Longreach’s long term relationship and strategic dialogue with Fujitsu and FCL Components (ex-Fujitsu Component). Through a two-phase public tender offer process, 75% of voting rights are held by Longreach and 25% of voting rights are held by Fujitsu through debt-like preferred shares.

• Strategic capital enhancement: improve financial capacity for strategic investments in CAPEX and R&D
• Further growth in Relay Business: strategic capex particularly in high-voltage EV automotive relay, as well as expansion of overseas customer base
• Business portfolio optimization: strengthen core products focus, including withdrawal from a strategically unattractive businesses
• Cost structure and efficiencies restructuring program: significantly reducing revenue break-even point and improving profit margin through streamlining manufacturing facilities, reduction of SG&A expenses and improving the variable cost ratio
• Cash flow optimization: working capital optimization and enhanced capex control
• Corporate governance & management enhancement: appointment of new President, CFO and rebuilding the corporate governance structure

Established in 1970, Kohikan is the second-largest full-service coffee shop business in Japan, with 277 stores (at the acquisition) and a strong brand profile nationwide. It operates under the Kohikan, Café di Espresso, Kohikan-Kura brands. Integrating with the Chat Noir Company, which operates the Caffe Veloce coffee chain, Kohikan became part of C-United in April 2021.

Corporate Divestiture. Longreach acquired 100% of Kohikan from UCC group, negotiated through a control buyout in May 2018.

• Appointment of new CEO and CFO with deep industry expertise, and strengthening of management bench
• Core growth strategy through store renovations and opening of new captive stores funded by capital injected by Longreach
• Enhancement of menu development and marketing function for branding and promotion to increase unit price and customers
• Expansion through franchise model, leveraging renewed brands and refining the business model tested in captive stores
• Refinement of service quality through restructured training program, hiring and retention plan, and stronger sales support from HQ
• Improvement of customer experience and operational efficiency through digital investment
• Enhancement of corporate governance, including new KPIs and performance aligned HR evaluation/compensation
• Non-organic growth through bolt-on acquisition

NOC was established as a subsidiary of Olympus.  NOC evolved into a one-stop BPO service provider with a business track record including over 700 companies since 1988.  The Company provides a wide range of services including back-office services (general affairs, accounting, HR, payroll), IT services (infrastructure building, kitting), fulfillment and logistics, staffing and others.  It has a well diversified blue-chip customer base including large Japan conglomerates, global firms, and government agencies, in addition to Olympus.

Corporate Divestiture. As a part of its business refocusing plan, Olympus decided to divest non-core businesses including its back-office support business and its camera business. Longreach negotiated the 100% acquisition of NOC in October 2016, being entrusted by Olympus with repositioning NOC for long term growth as an independent BPO service provider.

• Significantly improve enterprise value through transformation from an Olympus’ shared service subsidiary into an independent high growth BPO company with additional industry segment exposures
• Place new management team, notably with strong leadership through new CEO and CSO
• Expand non-Olympus business. Enhancement of consulting sales function leading to new customer wins expanding the non-Olympus client base
• Maintain the Olympus business as a stable revenue flow business
• Open new process center to expand BPO capacity. Support recruiting and retention as part of capacity expansion programs
• Expand BPO service menu with higher margin and recurring revenue business
• New HR system and culture change aligned to business performance

First Kitchen, a subsidiary of Suntory, operates and franchises a QSR chain in Japan providing hamburger, pasta, french-fries, salad and dessert. It operates approximately 130 directly owned and franchise stores in Japan.

Corporate Divestiture and Cross Cultural Solutions. Longreach acquired 100% of First Kitchen from Suntory together with becoming the sole Japan franchisee for Wendy’s, in combination to create the new “Wendy’s First Kitchen” QSR chain and growth strategy.

• Core growth strategy of converting the FK stores into WFK stores, creating platform for restaurant footprint growth while structurally increasing revenues and margins
• Installment of KIOSKs, development of smartphone applications and branding/promotion to enhance user experience
• Leverage brand value and promote differentiated product development and marketing strategy
• Improve operations and service levels as well as enhance cost efficiencies and reduce food loss rate
• New C-Suite management team (CEO, CFO) with deep industry expertise
• Enhanced corporate governance and culture, including new KPIs and performance aligned HR evaluation/compensation

Formerly a subsidiary of Hitachi, Via Mechanics (“VIA”) is a global leader in manufacturing micro-drilling machines for printed circuit boards (“PCBs”) and semiconductor packages, used mainly for data center server computers, automotive electronics components and smartphones.  Products include spindle micro-drilling machines, laser micro-drilling machines, and exposure machines, mainly sold to manufacturers of PCBs and semiconductor packages. Leveraging leading optical technology and machine performance, VIA maintains leading market share globally.

Corporate Divestiture. VIA was determined by Hitachi to be a strategic divestment. Longreach acquired 100% of VIA through a negotiated control buyout with Hitachi providing seller financing to show its support for the transaction. The deal was proprietary, originated through Longreach’s long-term senior relationship with Hitachi, enabling multi-year strategic dialogue and proposals leading to agreement on the divesture.

• New C-Suite management team (CEO, CFO, CSO) and new HR system and culture change, aligned to business performance and KPIs achievement
• Strengthened balance sheet supporting higher R&D in the core laser technology
• Fundamental strategic move to “Fab-light” world class operating model. Lower cost structure to dramatically improve break-even sales level
• Margin improvement through product focus on high-end machines, avoiding low-margin price competition against commodity players in China/Taiwan
• Sales increase through high level sales programs driven by CEO

• ~Focus on more profitable customers and products
• ~Implement strategic marketing activities

• Free cash flow increase and working capital improvement driven by CFO
• Non-core asset sales

SANYO Electric Logistics (“SEL”) was originally established in 1971 as a subsidiary of SANYO Electric, to handle its logistics operations, and was a Tokyo Stock Exchange listed public company prior to Longreach’s investment. SEL evolved into a leading 3PL provider with a dominant position in providing logistics services to the large domestic electronic retail chains, focusing on providing comprehensive logistics solutions to customers through IT and leveraging its network/platform.  With asset heavy/labor intensive processes such as trucking outsourced, SEL operates an “Asset Light” model.

Corporate Divestiture and Going Private. After the strategic merger of SANYO and Panasonic, Panasonic decided to have SANYO divest SEL to Longreach, executed through a going-private tender offer process for the 42% public stake combined with the acquisition of SANYO Panasonic’s 58% control stake. SANYO Panasonic reinvested a 5% stake to support its continued business relationship with SEL.

• Significant growth through capturing the continuing outsourcing trend of logistics operations from major corporations (non-captive clients)
• Strategic focus on winning 3PL business contracts from large-scale consumer electric retailer chains (e.g. Yamada Denki) in Japan
• Place new CFO to significantly enhance and drive financial management, including

• ~KPIs and MIS dashboard
• ~Focus on cash flow creation

• Introduce new HR and compensation incentive plan directly linked to financial KPIs
• Strategically re-position SEL from a captive logistics servicer to a truly multi-customer global 3PL company

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