J-STAR, a mid-market player in the Japanese private equity market, said it has acquired the shares of Dainichi from existing shareholders, including the founder’s family.
Established in 1973, Dainichi started as a feed business in Uwajima, one of Japan’s top marine aquaculture areas. The company later entered the fishery businesses selling farmed fish, mainly red sea bream and yellowtail.
“As a result, Dainichi has grown as a company that can support the entire aquaculture businesses,” according to the statement.
The company uses advanced aquaculture technologies in its operations. It also received the world’s first Aquaculture Stewardship Council (ASC) certificate, an international certification that proves responsible aquaculture products.
The acquisition comes as demand for farmed fish is increasing worldwide, given the heightened environmental awareness. J-STAR expects that the exports of fish farmed in Japan will increase and that the major mass retailers and the restaurant industry will shift from natural fish to farmed fish.
“We believe that the role of Dainichi will grow further in the aquaculture industry,” J-STAR said, adding that it will work with the current Dainichi management team to provide full support for the company’s growth initiatives.
Dainichi posted sales of ¥21.5 billion ($204 million) and EBITDA of ¥1.3 billion ($12 million) at its last fiscal year ending in January 2020.
J-STAR, founded in 2006 in Tokyo, provides capital to small and medium enterprises with a corporate value ranging from ¥3 billion to ¥10 billion. Since its founding, it has invested and/or supported more than 46 transactions in various industries such as consumer durables, services, healthcare, media, and manufacturing.
Its portfolio companies include clothing retailer WEGO Co Ltd, automotive parts manufacturer Honest Co Ltd and restaurant chain operator Echigoya Co Ltd.
In October 2019, the PE firm acquired three internet media companies – content creation firm Kurashino, lifestyle media publisher 1k, and user behaviour analyst CRAFTA – for an undisclosed amount.