Executive Summary

M&A Capital Partners Co., Ltd. (MACP) is a Japan-based company primarily engaged in M&A-related services, with a business model specialized in the business succession market for small and medium-sized enterprises (SMEs). The company is characterized by its success-fee-based compensation structure, which allows clients to use its services without upfront costs, thereby reducing risk and emphasizing results-based remuneration.

In the business succession M&A market in particular, the aging of business owners has intensified succession issues, and MACP has enhanced customer satisfaction by responding to these needs. The company’s main business segments include M&A brokerage, advisory services, database provision, and education and training services. Revenue for fiscal year 2024 is projected to reach ¥224.4 billion.

MACP’s competitive advantages are supported by its success-fee-based business model, the presence of highly qualified professionals, and a comprehensive education and training program. For the fiscal year ended September 2024, revenue declined by 8.1% year-on-year to ¥19,166 million, while the number of completed transactions increased by 29.1% to 204, reflecting growing demand in the M&A market.

Future growth strategies include securing and developing talented human resources, expanding the business succession market, and introducing new technologies. The company is also considering overseas expansion and the development of new businesses to achieve sustainable growth.

With regard to shareholder returns, MACP aims to provide stable and sustainable dividends, targeting a payout ratio of 30%. Investment risks include earnings volatility, regulatory changes, intensifying competition, and ESG-related risks, all of which require appropriate countermeasures. While pursuing sustainable growth, MACP is expected to maintain industry leadership by continuously meeting client needs.

1. Overview of Financial Results for FY2024 (Cumulative)

For the fiscal year ended September 2024, MACP recorded revenue of ¥19,166 million, representing an 8.1% decrease year-on-year. Ordinary income declined by 14.6% to ¥6,380 million. However, the number of completed transactions increased by 29.1% year-on-year to 204, reflecting heightened demand in the M&A market.

The reactionary effect from ultra-large transactions recorded in the previous fiscal year temporarily reduced revenue, but the increase in completed deals highlights strong underlying market demand and suggests potential for long-term recovery. Demand for business succession solutions remains strong across the industry, expanding business opportunities in the SME M&A market.

MACP has strengthened its sales structure to meet client needs, including increasing the number of consultants by 34 year-on-year to 184. Gross profit declined from ¥14,279 million to ¥12,305 million, and the gross profit margin fell from 68.5% to 64.2%. Selling, general and administrative expenses rose by 13.2% year-on-year to ¥6,829 million due mainly to higher personnel costs.

Operating income declined by 14.4% to ¥6,375 million, while net income increased by 5.6% year-on-year to ¥4,464 million, primarily due to reduced corporate tax expenses rather than core business growth.

Total assets increased to ¥55,773 million, and the current ratio remained extremely high at 584.2%. Operating cash flow was stable at ¥9,531 million, and free cash flow reached ¥9,448 million. However, investing cash flow recorded a significant outflow of ¥26,102 million, indicating aggressive capital investment.

Overall, while MACP maintains a strong industry position, it must implement growth strategies that do not rely solely on past achievements.

2. Earnings Outlook for FY2024

For the fiscal year ending September 2024, MACP forecasts revenue of ¥19,166 million and ordinary income of ¥6,380 million, representing year-on-year declines of 8.1% and 14.6%, respectively. Despite a 29.1% increase in completed transactions to 204, revenue declined due to the absence of ultra-large deals recorded in the previous year.

The company continues to strengthen its sales organization, with consultant headcount increasing by 34 year-on-year to 184, which is expected to contribute to higher transaction volumes going forward.

Gross profit declined to ¥12,305 million, and the gross margin decreased to 64.2%. SG&A expenses increased by 13.2%, resulting in a 14.4% decline in operating income. Net income increased to ¥4,464 million due to tax reductions.

Future recovery will require the establishment of a sustainable earnings model and a review of the cost structure, particularly improvements in SG&A efficiency and profit margins.

3. Medium- to Long-Term Growth Strategy

MACP has formulated a medium-term management plan covering fiscal years 2025 to 2027, targeting 240 completed transactions and 234 consultants. The core objective is to become Japan’s leading M&A professional organization by delivering high-quality services.

Key initiatives include strengthening professional capabilities, expanding deal size and quality, entering M&A-related peripheral businesses, enhancing education systems, and promoting digital transformation. Planned initiatives include enhancing online matching services and developing AI-based data analysis tools to improve proposal accuracy and transaction efficiency.

The company is also considering overseas expansion, particularly in cross-border M&A, to secure new growth engines. Key performance indicators under the plan include revenue of ¥21,408 million, ordinary income of ¥8,131 million, and 240 completed transactions.

Risk management is emphasized through enhanced data collection and analysis to enable rapid decision-making. Strengthening interdepartmental collaboration and information sharing is also expected to reinforce execution capabilities and support sustainable growth.

Business Overview

1. Overview of the Business Model

M&A Capital Partners Co., Ltd. (MACP) is a Japan-based company specializing in M&A services, particularly in the SME business succession market. Since its establishment, the company has served approximately 20,000 clients, primarily through M&A brokerage and advisory services.

MACP’s business model is distinguished by its success-fee-based structure, which allows clients to engage services without upfront investment. In addition, the company adopts a “direct proposal” strategy, proactively approaching potential sellers rather than relying on referrals, enabling it to secure high-value transactions and strengthen its competitive position.

The company’s core strength lies in business succession M&A, driven by the aging of SME owners and growing succession challenges. Through enhanced education programs and information services, MACP continuously improves employee expertise and achieves sustainable growth.

2. Main Business Segments

MACP’s operations consist of four primary segments:

1. M&A Brokerage: Focused on business succession and corporate restructuring M&A. The company achieved 221 completed deals in FY2024, with high client satisfaction under a success-fee-based model.

2. Advisory Services: Providing professional advice, including valuation and due diligence, to support informed M&A decision-making.

3. Database Services: Offering market analysis and competitive intelligence through proprietary databases and the industry publication MARR.

4. Education and Training: Enhancing employee expertise through in-house training programs, contributing to service quality and long-term client retention.

In FY2024, revenue from these segments reached ¥224.4 billion, representing approximately 17.1% year-on-year growth.

3. Market Position and Competitive Advantages

MACP has established a strong position in Japan’s M&A market, particularly in business succession. Key competitive advantages include its success-fee-based model, a highly qualified workforce (approximately 90% holding relevant certifications), robust education programs, and an extensive professional network with financial institutions and tax professionals.

4. Market Background

Japan’s M&A market is expanding rapidly, particularly in business succession, driven by an aging SME owner base and a severe shortage of successors. Approximately 260,000 SMEs face succession challenges, and government policies such as the SME M&A Guidelines further support market growth.

Digitalization and changing external environments are also accelerating corporate restructuring, creating expanding growth opportunities for MACP.

5. Management Strategy and Future Outlook

MACP has identified the following three key points as its growth strategy going forward and plans to develop its business based on these pillars.

1. Strengthening the Recruitment and Development of Outstanding Talent: As competition in the M&A market intensifies, securing highly specialized professionals and fostering their development is essential. To this end, efforts are required to enhance employees’ skills through the enrichment of in-house training programs and the establishment of external training opportunities.

2. Expansion of the Business Succession Market: In Japan, the number of companies facing a shortage of successors is increasing, creating growing demand for business succession solutions. To address this demand, it is necessary to adopt more diverse approaches. In particular, strengthening seminars and information services for business owners and deepening relationships with clients are increasingly important.

3. Adoption of New Technologies and Enhancement of Competitiveness: With the advancement of digitalization, M&A processes are also evolving. It is necessary to strengthen services that provide new value to customers by promoting the use of online matching services and data analytics.

By advancing these strategies, MACP is expected to achieve sustainable growth and establish itself as a leader in the industry. Furthermore, its responsible approach to business succession contributes to the stability of the domestic economy, and the company aims to continue to be an organization with social significance by delivering high-quality services to a broad range of clients.

The above provides a detailed overview of M&A Capital Partners’ business operations. Going forward, initiatives to maintain competitiveness in the evolving market environment while pursuing sustainable growth will be key to the company’s success.

Medium-Term Management Plan and Growth Strategy

1. Overview of the Medium-Term Management Plan

M&A Capital Partners Co., Ltd. (hereinafter, “MACP”) has formulated a medium-term management plan based on a three-year period from 2025 to 2027. This plan aims to increase both the number of completed transactions and the number of consultants, with specific targets of 240 completed transactions and 234 consultants. The fundamental objective of the plan is to establish MACP as Japan’s premier M&A professional organization by providing high-quality services to its clients.

Key initiatives under the plan include strengthening professional capabilities, expanding the quality and scale of transactions, entering M&A-related peripheral businesses, enhancing education and training systems, and promoting a digital shift. These initiatives are designed not only to improve financial performance but also to reinforce corporate culture and organizational structure, thereby contributing to sustainable growth.

For investors, this medium-term management plan serves as a guideline demonstrating how the company intends to translate its strategy into concrete actions and execution. The clear presentation of growth targets enhances credibility and fosters confidence in the company’s growth prospects.

2. Specific Investment Initiatives

MACP has developed an investment plan aimed at achieving sustainable growth. This plan encompasses a range of initiatives, including capital expenditures and human resource development, with a particular focus on investments in technology that support the company’s digital transformation.

Specifically, the company plans to introduce systems to enhance the functionality of its online matching services and to develop AI-based data analysis tools. These initiatives are expected to improve proposal accuracy and increase the efficiency of deal execution. In addition, expanding education and training programs to enhance consultant skills is a key initiative, with anticipated benefits extending to overall organizational growth.

These investments are expected to establish a foundation for MACP to strengthen its competitiveness within the industry and to drive further growth. In particular, the acquisition and development of highly skilled professionals are critical from a long-term perspective and represent an important factor in enhancing corporate value.

3. Growth Strategy through Priority Initiatives

MACP’s growth strategy extends beyond simple revenue expansion and adopts a multifaceted approach that includes the development of new businesses and the reinforcement of existing operations. In particular, new business initiatives such as the operation of M&A databases and support for turnaround and restructuring-oriented M&A are viewed as important areas, aimed at enhancing the company’s ability to respond to diverse client needs.

In addition, in light of the maturation of the domestic market, MACP is also considering overseas expansion. By promoting services specialized in cross-border M&A, the company seeks to secure new growth engines and strengthen its international competitiveness. Through the development of new markets and customer segments, MACP aims to achieve future growth.

For investors, this diversified growth strategy may help mitigate business risks and support the achievement of sustainable earnings over the long term.

4. Performance Indicators and Expected Outcomes

The establishment of key performance indicators (KPIs) under the medium-term management plan is critically important within the context of MACP’s growth strategy. Achieving the fiscal 2025 targets of revenue of ¥21,408 million and ordinary income of ¥8,131 million would represent a clear pathway toward improved financial performance. In addition, the target of 240 completed transactions is a key factor directly linked to earnings growth.

Achievement of these performance indicators is expected to enhance credibility and trust among clients, potentially leading to increased repeat business and the acquisition of new clients. For investors, the presentation of concrete growth targets is a positive factor that facilitates a clearer understanding of the company’s strategic direction.

5. Risk Factors and Risk Management

The business environment is constantly evolving, and the M&A market in particular is subject to a wide range of risks. Accordingly, risk management is an essential element of sustainable growth. MACP is focusing on strengthening its capabilities in information gathering and data analysis in order to enable swift and informed decision-making.

The ability to adapt to changes in the market environment is also critical for maintaining a competitive advantage. In addition, enhancing consultant skills and strengthening teamwork are essential to ensuring flexible and effective responses to potential risks. For investors, understanding the company’s approach to risk management contributes to more informed investment decision-making.

6. Execution Framework and Organizational Strengthening

The successful implementation of MACP’s medium-term management plan requires a robust execution framework. In particular, strengthening interdepartmental collaboration and promoting information sharing will enable more agile responses and contribute to improved quality of client services. Enhanced internal communication is also expected to boost employee motivation.

Furthermore, it is important to foster a culture that emphasizes teamwork and encourages the generation of new ideas and strategies. By doing so, the organization can operate in a unified manner toward growth objectives, supporting the achievement of long-term results.

In summary, through the implementation of these initiatives and a strong focus on risk management, MACP’s medium-term management plan and growth strategy are positioned as a framework aimed at achieving sustainable growth. For investors, the plan represents a key area of focus in assessing both its feasibility and the company’s future growth potential, warranting continued attention.

News and Key Topics

1. Record-High Number of Completed Transactions

M&A Capital Partners (MACP) recorded a record-high 204 completed transactions in the fiscal year ended September 2024, representing a year-on-year increase of 29.2%. This growth in completed transactions is regarded as a positive signal across the industry. As many companies show increasing interest in business succession and corporate integration, MACP has established an organizational structure capable of appropriately addressing such needs.

At the same time, revenue declined by 12.2% year-on-year, mainly due to the absence of ultra-large transactions recorded in the previous fiscal year. According to industry experts, while the increase in completed transactions is a favorable development, the recovery of revenue and profitability will be the key focus going forward. Investors are evaluating the rise in transaction volume positively while maintaining expectations for improvements in financial performance.

Looking ahead, contract liabilities increased by 63.8% year-on-year, suggesting a rise in the number of mandates received and pointing to the potential for future revenue growth. As a result, MACP is viewed as being on a growth trajectory; however, to sustain its industry leadership, the company must continue to focus on acquiring new mandates and enhancing the quality of its transactions.

 2. Increase in the Number of Consultants and Expansion of Operations

In the fiscal year ended September 2024, MACP increased its number of consultants to 221. The addition of 34 consultants represents a key element of the company’s strategy to expand its operations. Increasing consultant headcount not only contributes to higher transaction volume but is also regarded as a critical resource for improving service quality provided to clients. Securing human resources capable of responding flexibly to market trends is essential for maintaining long-term competitiveness.

Industry experts emphasize that, amid intensifying competition in the M&A market, the development of talent capable of delivering high-quality services is indispensable. MACP is also placing strong emphasis on training younger consultants, with expectations for the delivery of higher value-added services. These human resource development initiatives are likely to deepen trust with clients and expand growth opportunities.

In addition, attention should be paid to the broader industry impact of the increase in consultant headcount. How effectively MACP builds an organizational structure capable of meeting the diverse needs of a wide range of companies will be a key factor in further strengthening its competitive advantage.

3. Significance of the Newly Established IB Coverage Division

MACP has recently established a new “IB Coverage Division.” This newly created division is dedicated to M&A transactions for large corporations and aims to enhance the quality of services provided in this segment. One of its key roles is to uncover demand for large-scale transactions across the industry. Such transactions, typically ranging from several hundred million to several tens of billions of yen, require highly specialized approaches, making the establishment of a dedicated division strategically well justified.

Industry experts note that the creation of the IB Coverage Division is expected to further refine MACP’s operations and strengthen its market positioning. By offering strategic proposals tailored to large corporate clients, the company is more likely to gain client trust, making this initiative an important driver of corporate growth.

This new division is expected not only to solidify MACP’s position in the M&A advisory market but also to enhance its track record with clients, thereby contributing to greater trust and credibility.

4. Increase in Overseas Transactions and Market Opportunities

Recent financial results have highlighted a growing trend in overseas transactions. As the domestic market matures, expanding focus to international markets represents an important strategy for achieving sustainable growth. This trend also provides opportunities to enter emerging markets, potentially creating a competitive advantage over peers.

Experts believe that by leveraging its network and expertise, MACP can promote international M&A and mitigate risks inherent to the domestic market. Engagement in cross-border transactions may become a key driver supporting future growth. Furthermore, expansion into overseas markets can help secure new customer bases, thereby enhancing the company’s overall dynamism.

Such initiatives in new markets present opportunities for MACP to broaden its business scope and strengthen its leadership position. For investors, it is worthwhile to closely monitor how these activities contribute to future financial performance.

5. Introduction of the M&A Platform “BMP-CORPORATE”

The newly introduced fair and secure M&A platform, “BMP-CORPORATE,” represents a noteworthy initiative within the industry. Designed as a highly transparent platform that matches companies seeking to sell with potential buyers, it aims to invigorate the M&A market going forward.

Through the introduction of this platform, MACP is creating an environment that enables the intake of a greater number of sell-side mandates while strengthening partnerships with financial institutions nationwide, thereby establishing a framework capable of responding swiftly to client needs. This initiative is expected to further enhance MACP’s influence in the M&A market and play a key role in solidifying its position as an industry leader.

In addition, advertising strategies aimed at increasing platform awareness are being strengthened. These efforts are expected to lead to the acquisition of new clients and further improvement of MACP’s market position. Such changes in the operating environment may also contribute to broader industry trends and represent an important step toward realizing the company’s vision of becoming “the world’s leading investment bank.”

As MACP continues to implement a wide range of initiatives to expand its market presence, investors should closely monitor its growth strategy and assess the company’s long-term prospects. Going forward, MACP is expected to pursue sustainable growth while capturing diverse market opportunities, particularly in overseas markets and through the development of new services. Careful observation of how these initiatives impact the company’s financial performance will remain essential.

Company Overview

1. Basic Information

M&A Capital Partners Co., Ltd. (MACP) is a company specializing in M&A (mergers and acquisitions) services, with its headquarters located in Yaesu, Chuo-ku, Tokyo. Established in October 2005, the company has primarily developed its business around M&A advisory and brokerage services. MACP is currently listed on the Prime Market of the Tokyo Stock Exchange under securities code 6080. As of September 30, 2024, the company’s capital stands at ¥2.9 billion. The total number of employees is 311 on a consolidated basis and 244 on a non-consolidated basis.

MACP’s M&A services span a wide range of areas, including business succession M&A for privately held companies, tender offers (TOBs) for listed companies, carve-out transactions, and consulting services aimed at enhancing corporate value.

The company collaborates with RECOF Corporation and RECOF Data Corporation to strengthen its databases and information services, thereby enabling a rapid and effective response to client needs. Amid intensifying competition in the M&A market, MACP maintains an independent and neutral position and adopts a success-fee-based business model, which gives it a competitive advantage in building strong relationships of trust with clients. In this way, the company continues to enhance its presence as a trusted partner supporting clients’ growth.

2. Corporate History and Key Milestones

The history of M&A Capital Partners began with its establishment in October 2005. Initially headquartered in Shinjuku, Tokyo, the company focused primarily on M&A brokerage services for small and medium-sized enterprises. In March 2006, it relocated its headquarters from Shinjuku to Chiyoda, and in November 2013, it completed its initial public offering on the Tokyo Stock Exchange Mothers market. This listing enabled the company to secure the funding necessary to support further growth.

In 2014, MACP was designated to the First Section of the Tokyo Stock Exchange (now the Prime Market), strengthening its growth foundation. In October 2016, the company completed a management integration through the acquisition of all outstanding shares of RECOF Corporation and RECOF Data Corporation, thereby enhancing its service offerings through the use of M&A databases and media. In April 2022, MACP transitioned to the Prime Market, implementing measures to further improve corporate transparency and credibility. The company’s history is characterized by flexible management strategies and a strong growth orientation in response to changing market conditions.

3. Organizational Structure and Key Management

M&A Capital Partners has established a highly specialized organizational structure that emphasizes effective talent development and teamwork. President and Representative Director Satoru Nakamura has led the company since its founding in 2005, advancing management strategies based on his extensive knowledge and experience in the M&A industry. Under President Nakamura, a strong management team oversees each division, with approximately 270 professionals in the M&A consulting division alone, providing advanced advisory services.

The company has also strengthened its administrative and sales divisions, establishing a structure that enables swift and effective decision-making through close interdepartmental collaboration. In terms of training and evaluation systems, MACP implements performance-based incentive schemes and regular training programs, enhancing employee performance and organizational agility. Through these initiatives, MACP has created an environment that consistently prioritizes client interests and delivers high-quality services.

4. Major Subsidiaries and Affiliated Companies

M&A Capital Partners’ major subsidiaries include RECOF Corporation and RECOF Data Corporation, whose collaboration significantly contributes to the company’s competitive strength. RECOF Corporation provides M&A databases and information services, playing a key role in facilitating the flow of information within the industry. RECOF Data Corporation offers analytical insights into the M&A market, enabling the provision of timely and accurate information to clients.

In addition, MACP maintains partnerships with regional banks, securities firms, and accounting firms, creating a framework for joint deal sourcing and information sharing. These subsidiaries and affiliated companies serve as important resources for delivering customized services tailored to client needs. By addressing a wide range of client requirements, MACP continues to strengthen its brand value and enhance market trust.

5. Geographic Expansion and Market Strategy

M&A Capital Partners operates extensively both domestically and internationally and is actively considering further expansion into global M&A markets. In recent years, M&A activity has been particularly robust in Asia, prompting the company to formulate strategies aligned with these trends and to strengthen collaboration with partners. Through these efforts, MACP has enhanced its presence in new markets and established a flexible framework capable of handling a diverse range of transactions.

Business succession M&A for small and medium-sized enterprises, in particular, is expected to see growing demand in the future, and MACP is leveraging its strengths to expand in this area. The company is also focused on enhancing its M&A databases and consulting services to deliver greater value to clients. These market strategies not only support sustainable corporate growth but also represent attractive elements for investors.

6. ESG and Sustainability Initiatives

M&A Capital Partners promotes sustainable growth by integrating ESG (Environmental, Social, and Governance) considerations into its corporate strategy. As M&A activities can have significant environmental and social impacts, a responsible approach is increasingly required. In recent years, the importance of ESG has continued to rise, and the company has strengthened initiatives to meet external standards.

Specifically, MACP actively engages in transactions with a focus on social contribution and provides advisory services based on ESG-related information of counterparties. Through these efforts, the company supports sustainable corporate activities and establishes a stance of delivering value-added services to clients. For investors, MACP’s commitment to ESG-conscious management enhances its appeal as a company that offers long-term reassurance and stability.

7. Future Outlook and Strategy

M&A Capital Partners is expected to further strengthen its position as an industry leader and continue implementing initiatives aimed at enhancing competitiveness. In particular, investment in new technologies is viewed as critical, with an emphasis on services utilizing AI and data analytics. The adoption of such technologies enables faster and more accurate information provision, leading to improved operational efficiency and higher client satisfaction.

In its overseas expansion, the company is also required to maintain flexible operations that reflect an understanding of diverse cultures and local needs. By optimizing internal resources and continuing to invest in human capital development, MACP aims to enhance its global competitiveness and achieve sustainable growth. These initiatives are also likely to be a source of long-term returns for investors.

Looking ahead, M&A Capital Partners intends to continue taking on new challenges to further strengthen its market influence and credibility. As a result, it is important for investors to closely monitor the company’s developments, as sustainable growth strategies will be key to shaping its future.

Through its independent M&A services, M&A Capital Partners Co., Ltd. continues to support the growth of its clients. With a diverse range of services and a sound management strategy, the company is expected to further enhance its presence in the market and achieve sustained growth. As the discussion moves into subsequent chapters, further details and analysis are anticipated.

Shareholder Returns

1. Dividend Policy and Track Record

M&A Capital Partners has articulated a fundamental policy of aiming for stable and sustainable dividends as part of its shareholder return strategy. Specifically, the company has set a target dividend payout ratio of 30% and returns profits to shareholders based on this guideline. This policy is rooted in the philosophy of providing fair profit distribution to investors while maintaining sustainable corporate growth. In this context, “stability” signifies management’s confidence in the company’s future and serves as an important foundation for building shareholder trust.

In fiscal years 2022 and 2023, the company paid dividends of ¥40 per share, with payout ratios of 30.0% and 28.5%, respectively—levels that are close to its stated target. The company also expects to pay the same dividend for the fiscal year ended September 2024, suggesting a continued commitment to stable dividends alongside sustained profit growth. Such a dividend policy contributes to enhanced credibility by prioritizing shareholder returns in line with management strategy.

Moreover, a consistent dividend policy helps strengthen relationships with financial institutions and other stakeholders, while shareholder return initiatives can also have a positive impact on the company’s financial standing. To enhance market valuation, dividend stability and sustainability are essential, as they are expected to contribute to long-term share price stability. Going forward, maintaining this dividend policy and emphasizing shareholder returns will remain important.

2. Share Repurchases and Their Impact

Share repurchases are positioned as an important component of M&A Capital Partners’ shareholder return strategy. Through share buybacks, the company seeks to make effective use of its equity capital, enhance shareholder value, and increase earnings per share (EPS). As the number of outstanding shares decreases, each shareholder’s ownership ratio rises, which may support share price appreciation over the long term.

Recently, the company conducted a modest share repurchase in fiscal year 2024, although the scale was not particularly significant. This is believed to reflect a deliberate balance between growth strategies and investment opportunities, with priority placed on prudent cash management and maintaining corporate stability. Such buyback activities send a strong signal to shareholders that the company has a clear plan for future growth.

In addition, share repurchases serve as a powerful message to the market, effectively signaling management’s view that the company’s shares are undervalued. This can help build investor confidence and ultimately enhance shareholder returns. Depending on cash flow conditions, it will be important to establish a solid foundation for conducting share buybacks on a stable basis. In this way, share repurchases should continue to be viewed as a key strategy that contributes not only to short-term market effects but also to long-term corporate growth.

3. Financial Soundness and Total Shareholder Return Ratio

Financial soundness is a core element of any shareholder return policy. M&A Capital Partners is expected to implement dividends and share repurchases while maintaining a robust financial structure. At present, the company sets its dividend payout ratio at approximately 30% and secures stable cash flows to support shareholder returns.

Financial strength is particularly important in determining whether a company can continue paying stable dividends during unforeseen events or economic downturns. In recent years, the company has maintained ample cash flows and relatively low interest-bearing debt. This financial flexibility supports growth investments, share repurchases, and stable dividend payments, thereby strengthening the total shareholder return ratio.

When a company’s stated payout targets align with actual performance, it reinforces its commitment to shareholders. Such transparency is attractive to investors and helps foster trust. In this regard, a sound financial base combined with a clear dividend policy serves as a critical foundation for effective shareholder returns and significantly influences investor evaluations.

4. Medium- to Long-Term Policy and Sustainability

While placing strong emphasis on shareholder returns, M&A Capital Partners also manages its business with a clear focus on medium- to long-term growth strategies. This approach demonstrates that the company pursues growth investments in parallel with the payment of stable dividends. Ideally, shareholder returns should be implemented without compromising long-term growth potential.

To fully capitalize on growth opportunities, the company must appropriately reinvest its profits. In this sense, dividend payments are not merely a form of monetary return but are positioned as part of a sustainable management framework. As growth investments bear fruit and overall corporate performance improves, shareholder returns are naturally expected to increase. Such growth-driven earnings enhance investor confidence and contribute to higher corporate valuation.

Achieving sustainable shareholder returns requires a clear vision and strong execution by management. The company must continue striving to pursue growth while maintaining consistent returns to shareholders, while also cultivating flexibility in response to changes in the market environment. Balancing long-term growth with stable shareholder returns is essential for sustained success.

5. Communication with Investors

M&A Capital Partners places strong emphasis on clarifying its stance on shareholder returns and maintaining active communication with investors. High levels of transparency not only deepen investor trust but also enhance expectations for the company’s growth. Detailed disclosure of dividend policies and earnings outlooks enables shareholders to make more informed investment decisions.

The company’s management actively communicates its financial condition and growth strategies through investment journals, annual reports, and other disclosure channels. This approach ensures fair and transparent information sharing and serves as a differentiating factor relative to competitors. As shareholders gain confidence in the company’s future and continue to allocate capital, a virtuous cycle that supports further corporate growth is expected to emerge.

To further strengthen communication with shareholders, the company regularly holds analyst meetings and earnings briefings, providing comprehensive feedback on performance and outlook. Such transparency and sincerity help fulfill corporate accountability to shareholders and form the foundation of long-term corporate trust.

M&A Capital Partners’ shareholder return policy aims to achieve sustainable growth while maintaining dividends, share repurchases, and a high level of transparency. Investors are encouraged to evaluate these policies comprehensively and pursue long-term asset formation. The company’s continued commitment to shareholder returns alongside future growth is expected to foster trust and contribute to enduring enhancement of corporate value.

Investment Risks

1. Factors Affecting Earnings Volatility

The performance of M&A Capital Partners is largely dependent on fluctuations in the market environment, particularly changes in demand for M&A services and the number of mandates received, which have a significant impact on revenue. The company’s core services—M&A brokerage and advisory—are closely tied to domestic economic conditions. In particular, among small and medium-sized enterprises (SMEs) in Japan, M&A demand is inevitably influenced by issues such as a shortage of successors and slowing market growth. When the economy is strong, many companies pursue growth through M&A; conversely, during economic downturns, M&A activity is expected to slow. As a result, earnings are subject to volatility driven by multiple factors, and reliance on specific conditions increases risk exposure.

Intensifying market competition is another important factor contributing to earnings volatility. The M&A market is a growth sector that has attracted numerous competitors, leading to increased pressure on deal flow and advisory fees. The entry of new players and major financial institutions has raised expectations for service quality, but this also increases costs and heightens the risk of margin compression. Furthermore, as clients gain more choices, the value proposition and differentiation of the company’s services are subject to increasingly rigorous scrutiny.

Economic instability also plays a critical role. Fluctuations in interest rates and rising inflation can directly affect M&A demand. In periods of heightened economic uncertainty, clients may become more reluctant to pursue M&A transactions, resulting in fewer mandates. Given the company’s success-fee-based business model, such declines can have a direct and material impact on revenue. Accordingly, it is essential to continuously monitor these performance drivers and implement appropriate countermeasures.

2. Industry-Specific Risks

The industry in which M&A Capital Partners operates involves inherent risks. Among the most significant are changes in laws and regulations. M&A-related regulations are frequently revised, requiring companies to respond promptly. In addition, as corporate governance regulations become more stringent, measures to prevent fraudulent transactions and unfair practices are increasingly demanded, which may affect business operations.

Securing talented professionals is another major challenge amid intensifying competition. High employee mobility within the industry and rising training costs pose ongoing risks. Given that M&A advisors require advanced expertise, there is a heightened risk of skilled professionals being recruited by competitors, which could make it more difficult to maintain service quality.

Information asymmetry is also a characteristic risk of the industry. In particular, M&A involving SMEs often suffers from limited information availability, increasing the likelihood of inaccurate valuations. This may result in losses for investors or sellers and can undermine trust in the industry as a whole. In addition, unpredictable external factors—such as the impact of the COVID-19 pandemic—can disrupt business operations, making robust risk management an especially critical issue.

3. Financial and Management Risks

M&A Capital Partners faces risks on both financial and managerial fronts. A notable concern is revenue volatility stemming from its reliance on a success-fee-based business model. In the event of a decline in mandates or weak business conditions, the company may experience a sharp drop in revenue. When economic conditions deteriorate, M&A activity tends to slow, reducing contract volume and making it more difficult to secure long-term profitability.

Liquidity risk must also be considered. Delays in client payments or difficulties in securing financing could lead to shortages in working capital, potentially disrupting operations. In particular, an inability to rapidly allocate resources when significant M&A opportunities arise could substantially impair competitiveness.

Management risks include inadequate corporate governance. As transparency is increasingly demanded of boards of directors and executive management, inappropriate actions or decisions could severely damage the company’s reputation. Since corporate reputation has a strong influence on competitive positioning, management must consistently adhere to ethical standards and ensure transparent decision-making to maintain trust.

4. Risks Related to Overseas Expansion

Although M&A Capital Partners remains largely dependent on the domestic market, overseas expansion also entails significant risks. As international M&A activity increases, competition with foreign firms is intensifying. This could erode the company’s competitive advantages in the domestic market and limit success opportunities abroad. Differences in legal systems, regulations, and business practices across countries present additional challenges, requiring a thorough understanding of local business environments and the ability to adapt accordingly.

Economic and political instability also pose risks. M&A transactions involving companies in certain countries or regions may be affected by economic sanctions or political tensions, potentially having a severe impact on business operations. In recent years, geopolitical risks have increased, heightening the need for capabilities to respond effectively to such developments.

To maintain competitiveness in international markets, it is essential to implement efficient strategies and remain flexible in responding to change. Investors should closely examine how the company assesses overseas expansion risks and what measures it takes to ensure the sustainability of its global strategies.

5. ESG-Related Risks

In the current investment environment, ESG (Environmental, Social, and Governance) factors have gained increasing prominence, and companies are expected to address the associated risks. For M&A Capital Partners, it is essential to promote awareness of social responsibility and environmental initiatives among the companies involved in its M&A transactions. As ESG-related regulations tighten, corporate sustainability is playing an increasingly important role in investment decisions.

Investors should pay close attention to whether the company appropriately recognizes ESG-related risks and implements effective countermeasures. As social pressure intensifies, insufficient ESG initiatives may undermine trust among clients and investors alike. Considering how such shortcomings could affect business performance, the pursuit of a sustainable growth strategy has become indispensable.

6. Natural Disaster and Geopolitical Risks

In Japan, natural disasters—such as earthquakes and typhoons—represent non-negligible risk factors. Historically, major natural disasters have had significant impacts on economic activity, often necessitating adjustments to due diligence processes and transaction schedules in the M&A industry. Such events may result in a temporary slowdown in transaction activity.

International geopolitical risks also warrant consideration. For example, heightened tensions with neighboring countries or the imposition of international economic sanctions may negatively affect market sentiment toward M&A, potentially reducing transaction volumes. In response, strengthening risk management frameworks is essential.

Both natural disasters and geopolitical risks are therefore critical considerations for M&A Capital Partners, and it is important to continuously assess these risks from a long-term perspective.

7. Conclusion

M&A Capital Partners faces a wide range of investment risks, necessitating appropriate and proactive countermeasures. These risks include performance volatility, industry-specific challenges, financial and managerial risks, overseas expansion risks, ESG-related risks, as well as natural disaster and geopolitical risks. By accurately identifying and addressing these factors, the company can pursue sustainable growth. At the same time, investors are expected to make informed decisions with a clear understanding of these risks.

When making investment decisions, it is essential to evaluate the company’s efforts to mitigate risks alongside one’s own risk management approach, while carefully considering future prospects. Accurately recognizing risks and implementing appropriate responses will be key to maintaining sustainable competitiveness in an M&A market that is undergoing significant transformation.