From in-house development to overseas M&A (2020)

Growth bought, and margins built

This shift cannot be captured by saying that a company built on in-house development turned to M&A. What Nakanishi chose was to extend, unchanged, the strength it had built on a single point — second in the world in rotary equipment, with margins above 30% — across a different set of products. DCI’s dental treatment units, Jäger’s industrial spindles, Refine’s low-priced dental line: each is an adjacent field that can be carried on the sales network and customer base already built for rotary equipment. That it stacked acquisitions onto existing channels rather than diversifying into unrelated territory appears to be the core of the strategy.

That said, the businesses bought and broadened have not yet reached the profitability of the original. In the year to December 2025 the group swung to a net loss on extraordinary losses including an impairment of the DCI business — the price of buying scale, showing up in the numbers. Whether it can close the gap between the margin above 30% it machined for itself and the profitability of the businesses it absorbed remains open under NV2030. An acquisition can buy the speed of growth, but not the constitution that produces high margins. What Nakanishi has to demonstrate next is whether it can lift the businesses it bought to its own rate of return.