ACA Group is an investment company, 30.93% of whose shares are owned by Sumitomo Corporation, that has a record of many capital tie-ups with small and medium-sized companies. The group comprises multiple teams inside and outside of Japan.
ACA Small Buyout is a team of experts that specialize in investments in small and medium-sized companies in Japan with annual sales ranging from 500 million to 5 billion yen. The team has a large amount of investment experience and a wide range of knowledge and skills. As a leader in small-cap investments in Japan, ACA Small Buyout strives to develop these types of companies and maximize investor assets.
ACA Small Buyout manages small buyout funds that seek to offer short-term paybacks to the investor by investing in small domestic companies at an undervalued price.
Strategy #1: Build strength in the small-cap field
The target small and medium-sized companies are those that post sales ranging from 500 million to 5 billion yen. The team does not consider deals with a total market value of between 5 to 10 billion yen, which many middle-range buyout funders target.
Strategy #2: Undervalued investments
The team does not participate in auctions and considers only deals in which negotiation is possible with the seller.
The team successfully performs investments at low entry prices. (The goal is between 2.5 to 4.5 EBIDTA. The same applies for the actual figures.)
Strategy #3: Short-term ownership
Instead of focusing on transforming company management thoroughly, the team seeks to create early hands-on effects by leveraging the existing management. Generally speaking, the team will find a new shareholder in couple of years.