Bain Capital not only clinched the top two deals – York Holdings and Mitsubishi Tanabe Pharma – but landed two others within the top 10 buyouts.

The third largest was the Topcon deal by the KKR/JIC Capital consortium, with KKR and Walmart’s Seiyu exit following in fourth place as the top exit transaction.

There continues to be a lot of private capital out there, according to Randy Laxer, global co-chair of the private equity practice at Morrison Foerster.

Many of the major global PEs are growing their Japan teams, a manifestation of their bullish outlook on the market, he noted.

Noncore divestitures and take-privates supported by corporate governance reforms, stock exchange pressures, and shareholder activism; as well as succession-driven opportunities continue to catalyse activity.

In recent years, many Japanese companies have increased efforts to restructure business portfolios and sell off non-core operations, according to Shizuka Aida, managing director at Accenture Strategy & Consulting.

As economic uncertainty grows, large companies are becoming more cautious about making new investments. They are looking to generate cash and improve capital efficiency via portfolio review and non-core divestitures, he said.

“Given such business portfolio restructuring and the increasing number of business succession needs among owner-operated companies, I believe a significant volume of assets will continue to come to market across industries,” he said. ”The outlook for private equity investment opportunities remains very positive in my view.”

Strength in numbers

One key trend which started in 2024 and looks to be gaining momentum this year is midmarket PE players increasingly accessing bigger deals in Japan, according to Laxer.

Having a larger pool of potential PE bidders is advantageous for players that may want to team up with fellow PEs to target deals they historically could not pursue size wise. Such collaboration between PEs also serves to derisk and syndicate part of their investment, he added.

It also hits the mark with foreign PEs coming into Japan that need the reputation and capacity to start building track record in the country. This is also a reflection of geopolitical risks in the region, where more foreign PEs are shifting their gaze towards an alternative market with promise, Laxer explained.

New faces are appearing on Japan’s PE scene. Last year alone:

• China’s Ocean Link made its Japan debut by acquiring Hotel MONday alongside Delonix Group and an existing portfolio company.
• Australia’s Potentia Capital teamed up with J-Star to acquire HR software provider Jinjer.
• Chinese YF Capital acquired contact lens maker T-Garden from Integral.
• FountainVest alongside Unison Capital acquired Tasaki, a jewellery company, from MBK Partners.
• Pan-Asian PE Hillhouse entered Japan via its takeover of real estate firm Samty Holdings, and also bid in Mitsubishi Tanabe Pharma auction, Mergermarket  reported.

Mergermarket also reported last month that Menlo Park-headquartered healthcare-focused Lyfe Capital is also keen to enter Japan through partnerships with domestic GPs.

Location, location, location

Real estate is a sector to watch this year, an industry expert said.

Many PEs are asking advisors for targets with big property assets – companies with actual real estate assets as well as those with sizeable corporate property/offices that come from corporate carveouts for example, he said.

Integral Corporation launched its real estate investment unit last year. As Mergermarket reported earlier this year, real estate investments were high on the agenda for Bain.

Real estate assets were a focal point in the Fuji Soft deal last year, the industry expert said.

Chinese PE funds are also increasingly turning their attention to Japan’s real estate sector, shifting capital away from markets such as the US and Europe, according to Richard Guan, CEO of Purple Capital.

They are moving beyond simple buy-and-flip strategies and are now showing a stronger preference for full-scale development projects, starting with land acquisition, said Guan. A common strategy involves partnering with internationally recognised hotel brands to develop new properties in Japan, operate them for a few years, and then exit — typically within a five-year horizon.

Following a hiatus from around the time Covid struck, PE activity in the sector appears to be picking up, starting last year. There were five deals worth USD 6.03bn in 2024, the largest volume over the past six years, even against 2019 with its USD 5.1bn UNIZO Holdings deal.

This year has already seen USD 3.10bn on three deals, led by Brookfield’s USD 1.6bn investment in the Tokyo-based Gajoen complex and Nagoya-based logistics project.

Furthermore, brewery/beverage player Sapporo Holdings has reportedly put bidders including Lone Star, Bain Capital, and KKR through to a second round for subsidiary Sapporo Real Estate, in a deal that could fetch more than JPY 400bn (USD 2.8bn).

Top ten Japan real estate PE deals since 2019

Source: Mergermarket, data correct as at 19-Jun-25