Hundreds of thousands of Japanese companies have a problem – their founders are aging without a successor in sight.
The Japanese government estimates that as many as 6.5 million workers could lose their jobs if profitable small businesses with elderly founders and no succession plans don’t find new owners.
It’s a significant economic problem caused by Japan’s demographic challenge: a shrinking population that’s aging rapidly, a trend that is even more intense in rural areas where many small businesses with elderly founders are located.
One Japanese banker – who watched up close as his grandfather couldn’t find a buyer for his successful real estate business – has built a business, and a $1.3 billion fortune, on the promise that M&A is the way forward.
That’s the topic of this week’s The Closer Weekly.
Traditionally, small Japanese companies have been passed to the next generation or a trusted deputy of the founder. Shunsaku Sagami, who founded M&A Research Institute Holdings, has a huge database of companies whose founders are about to retire and uses various tactics – including AI – to match sellers and buyers.
M&A Research Institute Holdings went public last June and the stock has more than tripled since. It’s closed 62 deals in the first six months of this year and says it has over 500 deals in its pipeline.
The company’s success is a testament to how sometimes the most innovative thing you can do is run a very normal kind of business where that kind of business isn’t normal.
Closers in the News
📉 Carl Icahn admitted to the Financial Times that over the past six years, he lost $9 billion betting that the stock market would collapse. “I’ve always told people there is nobody who can really pick the market on a short-term or an intermediate-term basis... Maybe I made the mistake of not adhering to my own advice in recent years.”
🏦 Stock market investors really seem to think that President Joe Biden and House Speaker Kevin McCarthy are close to a deal to end the debt-ceiling standoff.
💬 And from the Washington Post, here’s a useful primer on who is actually at the table negotiating for the White House and House Republicans .
🐊 Disney, in a feud with Governor Ron DeSantis, has pulled the plug on a $1 billion development in Florida, backtracking on a plan to move a 1,000 employee division from Southern California to the Sunshine State.
🗞️ Sam Zell, the legendary real-estate investor who ended up buying the Chicago Tribune and the Los Angles Times and pushed their parent company into bankruptcy, has died at 81.
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