Buying regional maintenance firms and folding them into the regional subsidiaries (2020)

Buy the units, close the company

The company moved to a holding structure and placed operating subsidiaries region by region, from Hokkaido to Tokai, in April 2015 — five years before the first acquisition. Because the vessel was ready first, Seiko Elevator’s 800 units and Shoowa Yusoki Tohoku’s roughly 230 could be loaded straight onto the territory of an existing subsidiary. What chairman and CEO Ishida Katsushi was collecting, it appears, was not companies but maintenance contracts by the unit and the technicians who service them.

Yet the pattern worked partly because every target was a local operator of a few hundred units. Running acquisitions and absorptions at the same speed, the number of consolidated subsidiaries has not risen above the thirty on the books at March 2022, and goodwill has been falling from its peak of $19M (¥3bn) at that same date. Past 110,000 units, the company still estimates its domestic share at only about 8%. That not one acquired company has been left standing shows that what it wanted was never a brand or a legal entity.