Zico, Yamada set up platform to connect Asean SMEs and Japanese investors

By HARIZAH KAMEL

ZICO Holdings Inc and Japan’s Yamada Consulting Group Co Ltd (YCG) have formed a joint platform for advisory and consulting services to bridge a major funding gap between Asean small and medium enterprises (SMEs) and Japanese investors.

Zico’s MD Chew Seng Kok (picture) said the strategic collaboration aims to provide advisory and consulting services to Japanese investors and businesses in Asean.

“It will facilitate the provision of such services between Japanese companies who are seeking acquisition targets and Asean businesses, particularly SMEs, who intend to obtain investments or divest their businesses to international investors,” he said in a statement last week.

The tie-up takes place amid economic uncertainty, worsened by the Covid-19 crisis, as many Japanese corporations accelerate transformation through acquisitions in the face of an ageing population and slow domestic growth.

At the same time, Asean SMEs will have access to more sources of funding beyond traditional bank borrowings.

Due to concerns arising from the pandemic, the momentum to increase investment flows and business relationships between the two regions is expected to gather pace, boosted also by the strong network and deep client relations that both parties have in their respective regions.

Meanwhile, Zico also announced separate agreements with two Malaysian sell-side advisory companies with an extensive client base and strong professional networks in the country.

They are Sage 3 Sdn Bhd, a leading corporate finance advisory firm offering range of services including debt restructuring and financing, and Andersen Corporate Restructuring Sdn Bhd, a boutique corporate restructuring firm.

Zico said the collaboration with these leading independent firms provides valuable access for businesses-seeking capital and investments for expansion from Japan.

Consequently, it will also play a key role in strengthening Zico and YCG’s partnership by facilitating the identification of acquisition and investment targets for Japanese investors in Asean.

YCG president and CEO Keisaku Masuda said Japanese corporations are eager to capitalise on opportunities in Asean.

“The potential for a surge in investment flows between Japan and Asean, hastened by the Covid-19 situation, makes it more conducive for both parties to collaborate.

We see Zico as a partner who shares our aspirations in seeking to build economic bridges between the two regions,” he said.

YCG has over 900 staff and offices in 13 Japanese cities, Asean, Shanghai and Los Angeles.

YCG focuses on, among others, restructuring and business succession consulting for Japanese corporations, many of whom seek acquisitions, alliances and extended business networks, offering major buy-side opportunities which the YCG-Zico platform can address.

The Zico – YCG partnership aims to provide Asean SMEs with professional services support and access to corporations, as well as pre-IPO investors, and providers of mezzanine capital and private equity, initially targeting those in the range of RM44.2 million to RM220.8 million each.

Projects will be geared towards achieving business succession and transformation for target companies and SMEs, eventually leading up to exits through IPOs or trade sales.

The impetus from the buy-side is driven in part by activist shareholders in Japan demanding better returns and performance.

Masuda said based on independent estimates, 63% of Japanese corporations are reviewing their direct investment portfolio every three months, with about half of them saying they intend to acquire companies over the next year.

Additionally, both sides will develop and execute corporate finance and merger and acquisition advisory projects; identify and facilitate international buyers and sellers; create, secure and execute sell-side and buy-side mandates; and support geographic acquisition strategies of corporate finance clients.