Our Business

One-stop comprehensive solution provider offering everything from production to wholesale of non-ferrous metal materials, parts, and products

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Manufacturing

ALCONIX’s M&As

An M&A System That Promotes CSV Management

Mergers and acquisitions (M&As) are a key driver of growth for the ALCONIX Group. In light of this, we have established an M&A system that promotes CSV management,* pursuing social and economic value.
While ALCONIX’s advanced technology is specific to certain sectors, we have contributed to Japanese manufacturing by ensuring the business succession and subsequent growth of small to medium-sized companies that lack successors and investment capacity, highlighting them as acquisition targets.
To boost profitability, we also promote M&As of companies that can complement the capabilities of current Group subsidiaries. This two-pronged strategy, which emphasizes both business succession-focused M&As and complementary M&As, aims to create sustainability for ALCONIX.

Creating shared value:
A managerial concept in which a company benefits economically through activities to resolve social issues

Our Approach to M&As

The Seven Principles of
ALCONIX-Style M&A

  • We select companies with manufacturing technology related to ALCONIX’s business and avoid extending to unfamiliar business territories
  • We select companies with strengths in niche fields that will not become obsolete.
  • We will not intervene in cases of companies undergoing corporate restructuring and revitalization procedures.
  • We emphasize individual, standalone growth of a target company, and find Group synergies during the growth process.
  • We survey the target’s machinery and production equipment, and locate the potential for its next stage of growth.
  • We assess the owner’s integrity, the company’s vision for the future, and the company’s commitments to its vision.
  • We acquire 100% of all shares as a general principle.

At ALCONIX, we have established our own unique M&A principles that can be applied to practical, real-life situations, as opposed to a series of inflexible rules to be followed as procedure.
From our early projects onward, we have implemented M&As without depending on the support of financial advisors. This practice has enabled us to build a solid base of expertise. When considering an acquisition, we look for “GNT” companies in line with our M&A principles. We have reframed this term, which actually refers to “Global Niche Top” companies, to refer to companies that show potential to drive “Growth” in our existing businesses, excel in a particular “Niche” field, and possess “Technology” that is not prone to obsolescence.

ALCONIX’s M&A Process

Utilize Our Strength
in Networking,
Developed through Trading

01. Due Diligence

We determine acquisition targets based on the Seven Principles of ALCONIX-Style M&A. We place particular importance on finding targets that will serve as potential sources for growth due to their compatibility with the Group’s businesses as well as their manufacturing technology and expertise, which should bear little risk of becoming obsolete even amid uncertainty moving forward. We also target several small and medium-sized companies that face problems with succession. When executing such business succession-focused M&As, we take particular care to assess the people involved.
Specifically, we make sure that the management and owner of a target possess certain character traits that fit well with the Company, as well as a compatible attitude toward craftsmanship.

02. Determining a Match

An important aspect of discussions with candidates is assessing whether its management will mesh well with the management of ALCONIX. Therefore, we are careful to engage in dialogue that will give us a good grasp of the mindset of a target’s management and its shareholders. As part of this process, we set up factory tours of the target company as well as opinion exchanges attended by ALCONIX’s management team and the relevant Group company president. In addition, we invite the managers and executives of the target company to visit ALCONIX’s Group companies and provide opportunities for them to conduct interviews and see our sites with their own eyes. Our goal is to dispel any worries or concerns regarding the M&A by enabling members of the target company to engage with the Group’s president and its executives on an even playing field and inquire openly about any particulars about the M&A, post-merger integration (PMI),* and other matters.

Refers to the process implemented after acquiring a company as a consolidated subsidiary, aimed at generating synergies in order to maximize corporate value.

03. Appropriate PMI to Realize Growth

We believe that generating inter-Group synergies takes a long time, and we only pursue them after products or services created from our acquisitions properly align with customer needs. So instead of immediately trying to conceive potential synergies post-acquisition, we need to link the business of the acquired company with ALCONIX’s management resources, while developing the ability for this company to facilitate its own self-direction and drive. Once these steps have been taken and the seeds for synergies begin to show, we can thus move forward accordingly. To that end, we engage in PMI that involves the development of this self-direction and drive, making capital investments and building an internal control system that will help the acquisition find new customers and maintain or increase earning power. We navigate any conflicts that can occur between the need to respect the independence and autonomy of the acquired company and applying Group governance of the company as part of the ALCONIX Group to arrive at a balanced set of trade-offs. We are committed to PMI that will skillfully combine and control both aspects in order to ease any friction between them.

M&A as a Growth Driver

ALCONIX’s Manufacturing segment consists of manufacturing subsidiaries acquired through M&As. The segment accounts for 66.6% of EBITDA for the entire Group (averaged over fiscal 2017 to fiscal 2022), accounting for about two-thirds of the entire Group and making the segment a key source of revenue.

Appropriate PMI to Realize Growth

PMI to Develop
Self-Direction and Drive

The ALCONIX Group places an emphasis on PMI that increases the self-direction and drive of an acquired company, or the ability of a company to show earning power on its own merit. Using our brand of PMI, we intend to establish the self-direction and drive of each Group company while maximizing Group synergies.

Our PMI activities primarily concern the provision of management resources. These activities support the organic growth of acquired companies using the financial strength of the entire Group, with capital investment placed on the highest pedestal. Many of our acquisition targets are small and medium-sized companies, and due to limits on equity capital and access to loans, they tend to think conservatively about capital expenditures, which can cause them to miss out on growth opportunities. Knowing this, we strive to use our PMI activities to draw out the potential within the companies we acquire. We conduct M&As with the goal of leveraging these companies to increase the earning power of the Group. Therefore, whenever possible, we request that management- and executive-level employees continue to serve under the same conditions and treatment as prior to the acquisition.