Listing, and buying Central Uni to take the hospital’s fixtures in-house (2006)

What the order of the shopping list reveals

The listing proceeds could have gone into thickening the working capital of the materials trade; off-site SPD is a business that carries its own inventory, and every additional contract demands more cash. The largest sum the company committed in 2006 nonetheless went to a firm that lays pipe inside hospital walls and then maintains it. Reimbursement cuts had frozen equipment replacement, while plans to rebuild ageing hospitals were beginning to move. The intent appears to have been to secure, separately from the flow of materials, revenue that runs with the life of a building rather than ending at the sale.

Against an acquisition price of $62.3M (¥7bn), goodwill came to only $8.8M (¥1bn). For the buyer this was close to a bargain, and the securities report’s note that the target had “rapidly recovered its performance through structural-reform cost reductions and cuts in selling and administrative expenses” suggests it had been in the middle of a turnaround until shortly before. Ship nevertheless stopped at 54.1% of the voting rights and left $47.2M (¥5bn) of minority interests untouched for three years. The remaining 45.9% was taken in by share exchange in October 2009 — the same month the group moved to a holding-company structure.