Photo:PIXTA
An investment company, Lucian Holdings, has acquired nearly 30 small and medium-sized enterprises, causing troubles in many of them. What was Lucian doing to the selling companies? How were the brokerage firms that introduced Lucian as a buyer and conducted business involved? In the feature "M&A Brokerage Dark Side" #2, we explain the full story of the Lucian incident. (Deputy Editor-in-Chief of Diamond, Yasuo Katada)
What is the Lucian Incident A brief explanation of the entire incident
Since around autumn 2021, the investment company Lucian Holdings has acquired nearly 30 small and medium-sized enterprises across Japan through M&A, causing troubles in the majority of them. The representative has ceased communication since around January 2024 and has become untraceable. Therefore, the management strategy of Lucian and the intentions behind the repeated M&A remain unclear.
However, as testimonies from subsidiary companies involved in the troubles and reports such as the Asahi Shimbun Digital series "The Traps of M&A Brokerage" have progressed, the full picture is beginning to emerge.
According to the company documents presented during Lucian's repeated acquisitions, the company was established on November 11, 2021. The headquarters is located in Marunouchi, Tokyo. The goal is set to aim for an annual sales of 10 billion yen as a "cross-industry integrated company," and the corporate philosophy states, "Capture events from multiple perspectives and create new forms of business."
Lucian has been rapidly acquiring various industries through M&A since its establishment in 21, including wedding venues, vehicle parts and imported car sales, crushed stone sales, civil engineering, and agricultural corporations. This can be inferred as part of the company's efforts to achieve its stated goals of being a "cross-industry integrated company" and reaching an annual sales of 10 billion yen.
Why was Lucian able to advance M&A all at once? The key was the intermediary company that handled advice, negotiations, and procedures for the establishment of M&A.
In Japan, approximately 1.27 million small and medium-sized enterprises are said to be without successors, and if business succession is not urgently advanced, there will be a surge in closures, leading to dysfunction in the domestic supply chain. Amidst this, business succession through M&A has emerged as a powerful means to address this issue.
The government has established a business succession tax system and created the "Business Succession and Transfer Subsidy" to promote M&A for small and medium-sized enterprises. A "Small and Medium-sized Enterprise M&A Guidelines" has been created for M&A brokerage firms.
The M&A brokerage firm backed by the government was eager to facilitate M&A by searching for seller companies that wanted to sell their businesses for succession and buyer companies that wanted to grow through corporate acquisitions. Most M&A brokerage firms operate on a success fee basis, earning rewards through the completion of M&A, which further fueled their efforts.
Given this background, it is believed that Lucian was able to acquire multiple companies in a short period of time, despite being newly established.
The troubles caused by Lucian begin after the M&A is established. On the next page, we will explain the two main issues that became the cause of the troubles.
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