Acquiring PE-Backed Companies in Japan: Fund Sellers, Foreign Strategic Buyers and Japanese-Language Sale Processes

(USD figures are converted at USD/JPY = 150 for reference and rounded, except where a company disclosed a USD amount. Other currencies are shown as disclosed.)

In April 2025, Quaker Houghton, a US industrial process fluids company listed on the New York Stock Exchange, completed its acquisition of Dipsol Chemicals, a Japanese supplier of surface treatment and plating chemicals, for ¥23bn (~USD 153mn). The seller was Aspirant Group, a Japanese private equity firm. The transaction is one example of a route into Japan for foreign companies: acquiring PE-backed companies in Japan from the funds that hold them.

This article is written for corporate development and international business development teams at foreign companies considering acquisitions in Japan. It reviews the pool of PE-backed companies in Japan, the difference between owner-run sellers and fund sellers, 4 transactions in which funds sold Japanese companies to foreign strategic buyers, the Japanese-language sale processes run by mid-market funds, and the implications for foreign acquirers.

1. PE-Backed Companies in Japan

By our count, based on the portfolio lists that private equity firms in Japan publish, around 800 to 900 Japanese companies in which private equity funds invested from 2016 onward, a window that covers typical fund holding periods, were still held by those funds as of November 2026. Funds acquired these companies through business succession at owner-run companies, carve-outs from corporate groups and take-privates of listed companies. A fund holds each investment for a limited period and then sells it to a strategic buyer or another fund, or lists it, so each of these companies has an owner that plans an exit.

2. Owner-Run Sellers and Fund Sellers

Owner-run sellers

In our experience, owners of private companies facing succession first consider family members, management and Japanese companies they know, and few begin by looking for a foreign buyer. Some owners do sell to foreign companies, as in several transactions described in our sector articles, but a foreign company is rarely their first choice.

Market-wide indicators also place Japan low on inward investment and English proficiency, which forms the background to these owner preferences. According to Eurostat (based on UNCTAD data), the 2024 ratio of inward FDI stock to GDP was 5.5% for Japan, compared with 89.0% for the United Kingdom, 82.4% for Canada and 46.1% for the world, while Japan’s outward FDI stock was 53.6% of GDP, about 10 times its inward ratio. JETRO, using Japan’s own statistics, puts Japan’s inward FDI stock at ¥53.3tn at the end of 2024, or 8.7% of GDP. In the EF English Proficiency Index 2025, Japan ranks 96th of 123 countries and regions.

Fund sellers

Funds sell portfolio companies within their holding periods. In our experience, funds evaluate offers on price, terms and certainty of closing, and do not treat the nationality of the buyer as a criterion in itself. In the 4 transactions below, funds sold Japanese companies to foreign strategic buyers.

3. Sales of PE-Backed Japanese Companies to Foreign Strategic Buyers

Case 1: Aspirant Group, Quaker Houghton and Dipsol Chemicals (2025) — A Japanese fund sells a plating chemicals maker to a US industrial chemicals company

On April 1, 2025, Quaker Houghton completed its acquisition of Dipsol Chemicals, a Japanese supplier of surface treatment and plating chemicals and services, mainly for automotive and other industrial applications, for ¥23bn (~USD 153mn). Quaker Houghton disclosed Dipsol’s revenue as about USD 82mn for the 12 months ended December 31, 2024, and stated that the purchase price represented about 10.5 times Dipsol’s trailing 12-month estimated adjusted EBITDA of about USD 15mn. The seller was Aspirant Group, a Japanese private equity firm. Quaker Houghton stated that Dipsol gave it a leading position in the Japanese plating chemicals market that complemented its technical service model.

This transaction shows that (i) a Japanese private equity firm sold a portfolio company to a foreign company in an adjacent field of industrial chemicals, and (ii) the buyer described the target’s position in its market as complementary to its own business model.

Case 2: MH Capital Partners, IDEX and ERC (2012) — A US fluidics group acquires a fund-owned maker of components for analytical instruments

IDEX, a US maker of pumps, flow meters and other fluidics products, acquired ERC from MH Capital Partners II, L.P., a fund, on April 30, 2012, for an aggregate purchase price of USD 18.0 million, according to IDEX’s annual report. ERC, based in Kawaguchi, Saitama, makes gas-liquid separation and detection products, including in-line membrane vacuum degassers and refractive index detectors, for life science, analytical instrument and clinical chemistry customers, and had annual revenue of about ¥2.14bn. IDEX’s chief executive stated that ERC gave IDEX access to key analytical instrumentation customers and a strong manufacturing base in Japan.

This transaction shows that (i) a fund sold a Japanese component supplier with revenue of about ¥2bn to a foreign group in the same field, and (ii) the buyer cited access to customers and a manufacturing base in Japan.

Case 3: Bain Capital, Domino’s Pizza Enterprises and Domino’s Pizza Japan (2013 and 2017) — A fund sells a majority and keeps a minority with pre-agreed exit terms

Bain Capital acquired Domino’s Pizza Japan in 2010. In August 2013, Australia’s Domino’s Pizza Enterprises (DPE) agreed to acquire 75% of Domino’s Pizza Japan from Bain Capital Domino Hong Kong for ¥12.0bn. Domino’s Pizza Japan then had 259 stores. Under the agreement, Bain could sell its remaining 25% to DPE from 3 years after completion and DPE could buy it from 5 years after completion, both at a pre-agreed multiple of earnings, and DPE stated that the management team of Domino’s Pizza Japan had committed to remain. In 2017, Bain exercised its option and DPE acquired the remaining 25%.

This transaction shows that (i) a fund sold a majority to a foreign company in the same business and kept a minority with exit terms fixed in advance, and (ii) the management team remained after the change of owner.

Case 4: Carlyle, Unison Capital, CoorsTek and Covalent Materials (2006–2014) — Funds sell a former carve-out to a foreign company in the same field

In 2006, The Carlyle Group and Unison Capital acquired Toshiba Ceramics through a tender offer, and the company was renamed Covalent Materials in 2007. In December 2014, CoorsTek, a US maker of engineered ceramics, agreed with the funds to acquire Covalent; under the agreement, the funds were to transfer their entire holding, representing 95.2% of the common stock, to CoorsTek on December 26, 2014. CoorsTek’s chief executive stated that CoorsTek had known Covalent, formerly Toshiba Ceramics, for many decades.

This transaction shows that (i) funds held a carve-out from a large electronics group for about 8 years and sold it to a foreign company in the same field, and (ii) the buyer had known the company for decades before the sale.

In these 4 transactions, funds sold to foreign companies in the same or an adjacent field, at acquisition prices ranging from USD 18.0 million for ERC to ¥23bn for Dipsol. These facts suggest that funds include foreign strategic buyers in their buyer universe across a wide range of deal sizes. Cases 3 and 4 involve large global funds; the next section turns to sales by mid-sized Japanese funds, where the process differs.

4. Japanese-Language Sale Processes

In our experience, in mid-market sales run by mid-sized Japanese funds, process letters are written in Japanese, and foreign bidders are often expected to submit non-binding offers and negotiate definitive agreements in Japanese. Because the other bidders in these processes are typically Japanese companies, the sellers have little reason to run a parallel process in English. Sales by large global funds, as in Cases 3 and 4, are more commonly run in English.

Many mid-market funds run transactions in Japanese, and few maintain English-language deal teams. In our experience, sales by these funds also often begin with approaches through Japanese banks and other intermediaries before a process letter is issued. A foreign buyer without Japanese-language capacity therefore learns of these sales late or not at all, and joins a process at a disadvantage.

5. Implications for Foreign Acquirers

Target universe

The pool of PE-backed companies can be mapped. Many Japanese funds list their portfolio companies on their websites, and the year of investment indicates the period in which an exit is likely. Mapping portfolio companies by sector and year of investment identifies targets before a sale process begins.

Relationships with funds

In our experience, a fund is more likely to include a foreign buyer in a sale when the buyer has stated its interest in the sector and its capacity to close before the process starts. A foreign buyer can register its interest in specific portfolio companies or sectors with the funds that hold them.

Transaction structures and execution

Funds have agreed to structures that suit a foreign buyer’s entry into Japan, such as the sale of a majority with a retained minority and exit terms fixed in advance, with the management team remaining (Case 3). Once a process starts, the buyer needs to prepare its non-binding offer in Japanese and negotiate the definitive agreement in Japanese with its counsel.

6. Syntax Partners

Syntax Partners is a Japan-based M&A advisory firm that acts solely as financial advisor. In any transaction, we advise one side only, either the buyer or the seller.

Buy-side advisory

For foreign companies considering the acquisition of PE-backed companies in Japan, we map portfolio companies by sector, approach the funds that hold them, and support the transaction through non-binding offers, due diligence and negotiation of definitive agreements in Japanese and English. We have relationships with Japanese private equity firms, and we also support searches for owner-run companies and carve-outs from large groups.

Sell-side advisory

As an advisor that maximizes the interests of sellers and owners, we advise funds on the sale of portfolio companies, with foreign strategic buyers included in the buyer universe. In a transaction in which we advise the fund, we do not advise any buyer.

We welcome discussions at any stage, from early-stage exploration of acquisitions in Japan to live transactions.

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This article was prepared by Syntax Partners, Inc. based on public information, including companies’ official announcements, and statistics from JETRO, Eurostat and EF Education First.