Target Information

Advantage Partners Inc. has announced its agreement to transfer 72% of its shares in F.M.I. Corporation to Toho Co., Ltd. as of December 18, 2017. F.M.I., established in 1971, specializes in the import and sales of kitchen equipment for commercial use as well as manufacturing its own products. The company exclusively sells a variety of high-end kitchen equipment favored by world-class chefs in Japan, providing not only after-sales service but also employing chefs, pastry chefs, and registered dietitians to offer solutions related to menu creation, cooking methods, hygiene management, and labor-saving strategies.

F.M.I. is located in Minato-ku, Tokyo, and is led by President Nobuhiko Toshima. The company is notable for its comprehensive approach to supporting clients in the culinary industry, ensuring they have access to valuable resources and expertise to enhance their operations.

Industry Overview in Japan

The commercial kitchen equipment industry in Japan has shown steady growth, driven by the rising demand for restaurant and food service establishments that seek high-quality, efficient cooking solutions. The shift towards more sophisticated culinary experiences has increased the need for specialized equipment that meets both functional and aesthetic criteria.

Moreover, Japan's bustling food service sector has evolved significantly, influenced by global culinary trends and an emphasis on innovation. Restaurants and culinary professionals are increasingly looking for high-performance kitchen equipment that not only boosts productivity but also supports creative culinary expressions.

The growth of the food service market is further supported by advancements in technology, such as smart kitchen solutions, which enhance operational efficiencies and reduce waste. The cooperation between food suppliers and foodservice businesses continues to be critical; hence, companies like Toho play an essential role by offering not just ingredients but also integrating systems that improve business workflows.

As a result, the potential for investment in kitchen equipment for commercial use remains strong, with opportunities for high-quality suppliers to thrive in this competitive landscape.

Rationale Behind the Deal

This strategic transfer of shares from Advantage Partners to Toho is primarily aimed at enhancing the operational capabilities and market reach of F.M.I. by leveraging Toho's extensive distribution network and expertise in the food service industry. With continued support from Advantage Partners, F.M.I. aims to pursue its goal of achieving public listing while driving initiatives for growth and value enhancement.

Information About the Investor

Advantage Partners, established in 2001, is a renowned private equity firm in Japan that specializes in investment management and business support. They have a proven track record in identifying growth opportunities across various sectors and have facilitated numerous successful business transformations.

Since its investment in F.M.I. in July 2014, Advantage Partners has been actively involved in shaping the strategic growth plans and strengthening management capabilities at the company. Their involvement will continue post-transfer, indicating their commitment to F.M.I.'s long-term success.

View of Dealert

This transaction is viewed favorably as it brings together significant resources and expertise through the collaboration of two strong enterprises. The deal not only allows F.M.I. to capitalize on Toho's expansive market presence but also ensures the continued strategic support from Advantage Partners, which is vital for sustaining growth and preparing for potential public offerings.

Investing in the kitchen equipment industry in Japan, particularly through a strategic partner like Toho, is likely to yield substantial returns given the strong market performance and ongoing demand for innovative solutions in food service. This integration will facilitate the delivery of comprehensive value to customers and improve efficiencies across the supply chain.

Furthermore, the projected growth trajectories for both F.M.I. and Toho indicate exciting prospects for enhancing their market capabilities. Overall, this alignment presents a solid investment opportunity while aligning with trends of modern culinary practices and technology adoption in Japan.

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