Frequently Asked Questions

A complete success-fee structure means the advisory fee is incurred only when the M&A is formally completed (closing). We do not charge retainers, interim fees, or monthly advisory fees at any stage prior to closing — including initial consultation, preliminary review, no-name sheet preparation, buyer-candidate sounding, or term negotiation.

The intent is to lower the psychological and economic threshold of consultation for seller-owners, so that they can deliberate with comfort until a conclusion is reached. At the same time, because we are paid only on closing, we have a strong incentive to support the engagement through to completion.

That said, external specialist work — due diligence by attorneys, tax accountants, or CPAs; contract drafting and review; real-estate appraisal — incurs costs and specialist fees that are typically borne separately by the client. Cost estimates are provided in advance.

None of the above. JFSC's M&A intermediary service operates on complete success-fee. No fees are owed by the inquiring party across the entire process up to closing.

Specifically, the initial meeting, Information Memorandum (IM) preparation, candidate sounding, top-meeting coordination, term negotiation, and Letter of Intent (LOI) support are all covered within the success fee calculated post-closing. This is designed so that owners feel safe — knowing that "even if the process is halted midway, there is no loss."

Buyer-side fees may be structured differently depending on engagement size and complexity. This has no bearing on the seller-side client.

JFSC believes in transparent pricing and publishes its rate table in advance. Success fee uses the Lehman formula, a tiered-rate scheme that is the industry standard.

Note: JFSC does not accept additional fees from the buyer side, as this creates a conflict of interest. DD specialist fees (CPA, tax accountant, attorney) are paid directly to each specialist and are separate from JFSC's advisory fee.

Specific minimum fee amounts and per-engagement estimates are provided individually at the no-cost consultation.

The economic burden and the location of risk differ significantly.

Retainer-based intermediaries typically charge several hundred thousand to several million yen at contract signing — generally non-refundable even if no deal closes. JFSC's complete success-fee means zero burden if no deal closes.

That said, retainer models have their own merits — they help filter for serious engagements at the early stage and allow advisors to invest time confidently. JFSC, aligned with the spirit of complete success-fee, carefully aligns on engagement seriousness, preparation, and reasonableness of conditions at the initial stage.

The question is not "which is better" but which fits the owner's situation and preference.

Personal-guarantee release is one of the seller-owner's most pressing concerns. In principle, after closing, the buyer renegotiates with financial institutions to release the pre-transfer owner's personal guarantee.

The SPA typically includes, as a buyer representation or covenant, an obligation to release the personal guarantee within a defined post-closing period — with the buyer leading the guarantor-substitution negotiation. Operation under the Personal Guarantee Guidelines (jointly issued by the Japanese Bankers Association and the Japan Chamber of Commerce and Industry) has become more active, with release cases increasing.

However, depending on the buyer's financials and the bank's judgment, dual guarantees for a transitional period or release pre-conditions (net asset requirements, etc.) may attach. JFSC reflects the guarantee-release outlook in buyer selection and condition negotiation.

The release of individual guarantee contracts and collateral arrangements is ultimately an individual negotiation with each bank, with the final decision resting with the bank. JFSC, in coordination with attorneys, supports clause design oriented toward release.

For seller-owners, maintaining the jobs and conditions of long-serving employees is, alongside transfer consideration, among the most important priorities. JFSC treats employee retention as one of the highest-priority conditions from the buyer-selection stage.

In a share-transfer scheme, employment contracts transfer to the buyer (the target company) as-is, with salary, bonus, retirement allowance, and paid leave conditions maintained in principle. In a business-transfer scheme, individual transfer procedures with employee consent are required.

In practice, transfer agreements often include a clause that employment conditions will not be substantively disadvantaged for a defined post-closing period (typically 2-3 years), and JFSC negotiates in that direction.

Beyond the contract, JFSC carefully designs the timing of the transfer announcement, internal communication method, and individual key-person briefings — minimizing employee psychological burden.

The transfer consideration is determined by combining multiple valuation approaches, with the final figure set through buyer negotiation.

The three principal valuation methods are:

• Cost approach (adjusted net-asset method) — adjusts balance-sheet net assets to fair value
• Income approach (DCF / income capitalization) — discounts projected cash flows to present value
• Market approach (comparable-company / EBITDA multiple) — values based on multiples from listed comparables or past M&A transactions

For SME M&A, the adjusted net-asset plus goodwill method (adjusted net asset plus 2-5 years of normalized earning power, in simplified form) is widely used.

However, these are reference points only. Actual transfer consideration moves significantly with qualitative factors — strategic significance for the buyer, expected synergies, competitive pressure, and seller-side conditions (employment retention, name continuation). JFSC supports owner-acceptable price formation through multiple valuation methods and through negotiation with candidate buyers.

Final tax-evaluation and share-valuation validity should be confirmed by an in-house tax accountant or CPA.

Post-transfer involvement can be flexibly designed based on the owner's preference and the buyer's intent. Common patterns:

• Full retirement — step down promptly after closing and leave the company
• Advisor / counselor for a defined period — 6 months to 2 years, supporting handover, counterparty introductions, and key-person mentoring
• Continue as representative director — operating the field under the buyer's strategic direction
• Retain partial shareholding — remain as a minority shareholder, with potential re-exit at secondary transfer or IPO

In SME M&A, a 3-month to 1-year handover period is common, with the former owner in an advisor role handling handover to counterparties, banks, and employees.

If you wish to "leave immediately" or "fully disconnect from the family business," we negotiate in that direction. If, conversely, you wish to "see the company through the next few years of growth," that direction is also supported. Please share your timing preferences and degree of involvement openly at the initial meeting.

Post-closing handover and integration (PMI: Post-Merger Integration) is the decisive process determining the engagement's ultimate success. JFSC treats closing not as a goal but as a "new starting point," designing the handover plan from both seller and buyer perspectives.

The general flow:

• Pre-closing — 100-day plan formulation; identification of priority items (counterparty greetings, core-system integration, HR-system alignment)
• Closing to Day 30 — employee briefing, major counterparty / bank greetings, internal-structure organization
• Day 30-90 — operations-manual preparation, evaluation / salary alignment, IT / accounting system integration review
• Day 90-180 — synergy-initiative launch, former-owner gradual disengagement
• Day 180+ — PMI effect verification and adjustment

Integration difficulty varies considerably by industry, size, cultural gap, and integration scope — from full integration (brand, HR, systems unified) to sub-brand retention with operational autonomy, depending on the buyer's policy. JFSC pre-aligns with the buyer to minimize owner concerns (employee disruption, counterparty drift).

Whether the company name, brand, and business name survive is psychologically very important for seller-owners. If you wish, JFSC negotiates name and brand retention as a transfer condition.

Three general patterns:

• Full survival — company name, brand, and management structure maintained, operating independently as a subsidiary under the buyer
• Sub-brand survival — name preserved as one of the buyer's business divisions or brands, but corporate function moves to the buyer
• Integration / discontinuation — unified into the buyer's brand; name disappears

In SME M&A, buyers often wish to leverage local credit, counterparty relationships, and hiring brand — so the incentives often align toward name retention. Where the buyer has a strong group-unification policy, integration / discontinuation may occur.

Please share preferences such as "I want to keep the company name" or "I do not want to erase the trade name inherited from the previous generation" openly at the initial meeting. JFSC will then prioritize candidate buyers aligned with those preferences and embed the conditions in the contract.

Yes. JFSC primarily supports SME M&A in the revenue range of tens of millions to several billion yen, and frequently receives consultations from companies in difficult situations — unprofitability, debt excess, no successor.

Before concluding "we cannot sell because we are unprofitable" or "we are too small to find a buyer," please consult. Even when accounting shows losses, there are often buyer-valuable resources: specialized technology, regulatory licenses, counterparty networks, talent, location. JFSC organizes these "less-visible values" and supports preparation of the Information Memorandum (IM) that communicates them to candidate buyers.

For companies in rehabilitation, sponsor-type M&A (selecting a receiving entity premised on business continuation) is also an option. JFSC coordinates with rehabilitation-strong attorneys and CPAs as needed, including creditor coordination, out-of-court rehabilitation, and Business Rehabilitation ADR.

Nationwide across Japan. JFSC is headquartered in Tokyo (Nihonbashi-Ningyocho), but consultations and meetings can be conducted online (Zoom, Google Meet, etc.), so there are no distance constraints from Hokkaido to Okinawa.

Buyer-candidate exploration also spans the full range — from locally-rooted businesses to nationally-deployed operating companies and investment funds — selecting optimal candidates by industry, size, and region. Regional SMEs often draw better terms from out-of-region or cross-industry buyers than from local same-industry players, so nationwide exploration is JFSC's standard.

Where on-site meetings or facility inspections are required, JFSC dispatches staff. Please feel free to request.

JFSC covers a wide range of industries without limitation. Primary sectors include:

• Real estate / construction — real-estate brokers, construction, property management, renovation
• Medical / care / childcare — clinics, dispensing pharmacies, fee-charging elderly homes, service-attached senior housing, home nursing, daycare
• Retail / services — restaurants, beauty salons, esthetic, auto repair, dry cleaning, retail
• Manufacturing / wholesale — food manufacturing, machinery parts, specialty trading
• Other — inns / hotels, cram schools, IT / software, agriculture / livestock

JFSC has particular strength in mid-to-small-scale deals in real estate, construction, medical, care, retail, and services — with staff conversant in regulatory-license succession schemes (real-estate broker license, construction permit, medical corporation, care provider designation) and industry-specific issues (lease succession, dedicated qualified personnel, security deposits, medical reimbursement claims).

For sectors not listed above, please make contact first.

Yes — JFSC welcomes consultations from sole proprietors and small operators. Small-scale engagements in the range of several million to tens of millions of yen can be supported through business-transfer or corporatization-plus-share-transfer schemes.

For extremely small-scale engagements, given the fee ratio to transfer consideration and the difficulty of buyer exploration, JFSC may suggest combining with matching platforms (BATONZ, TRANBI, etc.) or referring to regional Business Succession Support Centers (public bodies, no-cost consultation).

JFSC proposes the optimal path based on the situation and preference regardless of scale — please make contact first.

Please consult. Closure (business liquidation) versus third-party succession (M&A) is a decision that warrants careful comparison — considering what is best for the owner, employees, and counterparties.

Closure involves substantial time and cost — facility disposal, inventory liquidation, employee severance, counterparty notification and contract termination, restoration, tax processing. M&A succession eliminates these liquidation costs and can yield transfer consideration. Most importantly, the business you have built, employee jobs, and counterparty relationships can continue in a different form.

Before concluding "a small unprofitable company like ours will find no taker," please consult JFSC. Local same-industry players, cross-industry new entrants, and locally-rooted sponsors often yield unexpected matches.

If, after consultation, closure remains the best path, JFSC refers attorneys and tax accountants strong in closure procedures.

Yes — companies in debt excess or with heavy borrowings can consult. In fact, such companies often have particularly strong reasons to consider third-party succession before closure or legal proceedings.

Common schemes for debt-heavy companies:

• Share transfer (with debt) — buyer assumes debt; requires buyer creditworthiness and bank consent
• Business transfer (debt separated) — business only transferred, debt remains with seller, residual debt repaid from transfer consideration or processed separately
• Second-company scheme — business moved to a new entity, debt processed in the old entity, combined with out-of-court rehabilitation or Business Rehabilitation ADR
• Sponsor-type M&A — sponsor selected in parallel with rehabilitation procedure (civil rehabilitation, out-of-court rehabilitation)

These schemes require multi-faceted expertise — bank negotiation, creditor coordination, tax processing, legal procedure. JFSC coordinates with rehabilitation-strong attorneys, CPAs, and tax accountants to propose the optimal scheme.

Even if the situation seems too late, earlier consultation widens the option set.

From consultation to closing, 6 months to 1 year is the standard guide. That said, depending on size, complexity, industry, and buyer-candidate situation, engagements can close in around 3 months or take 2 years or more.

Standard schedule:

• Month 1 — initial meeting, NDA signing, no-name sheet preparation
• Months 2-3 — Information Memorandum (IM) preparation, buyer-candidate approach launch
• Months 3-5 — top meeting with buyers, Letter of Intent (LOI) signing
• Months 5-8 — due diligence, final term negotiation
• Months 8-10 — SPA signing, closing

To shorten the period, early-stage organization of seller documents (financial statements, shareholder register, contracts), minute books, and coordination with the in-house tax accountant is important. Conversely, engagements involving regulatory-license succession, real-estate disposal, or pending litigation take longer.

Either, per the owner's preference.

Initial meetings are increasingly held online (Zoom, Google Meet, Microsoft Teams). For owners far from the office, those for whom daytime travel is difficult, or those who prefer to speak from home — online lowers the threshold, so please indicate.

For in-person meetings, owners can visit the JFSC office (Chuo-ku, Nihonbashi-Ningyocho, Tokyo) or JFSC staff visit the owner's business, home, or designated location. JFSC dispatches staff for regional owners.

Top meetings with buyer candidates are generally held in-person — typically at the buyer's headquarters, the seller's business, or a neutral location (hotel conference room) per mutual convenience.

The general M&A intermediary flow is 8 steps:

1. Initial consultation (no-cost) — current state hearing, condition confirmation, service / fee structure explanation
2. NDA signing → intermediary contract signing — agreement to substantive review
3. No-name sheet preparation — engagement summary without company name
4. IM preparation → buyer-candidate approach — detailed material preparation and candidate approach (NDA-preceded)
5. Top meeting — first in-person between seller-owner and buyer-candidate executive
6. Letter of Intent (LOI) receipt → basic agreement signing — buyer's acquisition conditions and interim agreement
7. Due diligence (DD) — buyer-side investigation of financial, tax, legal, and business
8. Final contract (SPA) signing → closing — share-transfer execution, consideration settlement

At each step, JFSC negotiates from a neutral position to maximize the seller-owner's interest while responding to the buyer's legitimate concerns.

Specific progression and schedule are explained at the initial meeting.

Yes — intra-family succession (succession to children, spouse, or other family members) is supported.

Intra-family succession differs from third-party succession in several ways:

• Higher continuity of management philosophy and culture
• Lower psychological impact on employees and counterparties
• Ability to reduce transfer consideration (gift or low-value transfer options)
• However, success depends on individual factors — the successor's management capability, resolve, and spouse's understanding

JFSC supports the following issue-organization for intra-family-succession clients:

• Successor development roadmap
• Share-succession scheme comparison (lifetime gift, inheritance, transfer)
• Business succession tax regime (special / general measures) application review
• Former-owner retirement timing and handover plan
• Intra-family consensus formation (siblings, spouse, prior-generation owner)

Note: special-measure application under the business succession tax regime has strict statutory requirements, including filing and application deadlines that have been subject to legislative extension. Specific deadlines, tax schemes, and amount simulations must be confirmed with the in-house tax accountant or a tax accountant strong in business succession at the time of consideration. JFSC coordinates with the tax accountant for overall scheme design and accompaniment.

Yes — enterprise-valuation-only engagements (not premised on M&A execution) are accepted.

Knowing one's own objective enterprise value matters in several contexts:

• As preparation for future M&A, IPO, or intra-family succession
• As material for negotiation with banks or investors
• As reference price for shareholder-structure adjustment (treasury share acquisition, inter-shareholder transfer)
• As reference for inheritance / gift share valuation (as economic value separate from tax valuation)

For valuation-only engagements, the fee structure is not complete success-fee but separately quoted, flexibly per engagement size and complexity. Please make contact first.

Valuation method combines cost / income / market approaches, applied per engagement nature. If tax-purpose share valuation (under the Basic Property Valuation Notice of the Inheritance Tax Law) is required, a tax accountant's valuation is necessary; JFSC refers in-house tax accountants or coordinates with referrals.

Yes — initial consultations are no-cost. Please reach out by phone, the contact form, or chat.

At the initial meeting, JFSC hears the owner's current state (business, financials, shareholder structure, successor situation, preferred timing, preferred conditions) and openly explains the services, anticipated scheme, period, and fee structure.

Engagement at the "not yet decided to sell," "currently consulting other firms," or "just gathering information" stage is fully welcome. We encourage comparing options before deciding.

Initial meeting takes 60-90 minutes — online or in-person per the owner's convenience.

Strict confidentiality is the top priority. JFSC always signs an NDA before the intermediary contract, with no external leakage of consultation content, company name, or financial information.

Buyer-candidate approach starts with a "no-name sheet" — an anonymized summary without company name, location, or other identifiable information. Company name and detailed information are disclosed only after the candidate shows interest and signs an NDA.

For internal employees, when and how to communicate is designed per the owner's judgment. Generally, the sequence is: individual key-person briefing immediately before or after the final contract, then full-company announcement. JFSC drafts careful announcement plans with the buyer to avoid internal disruption.

Counterparty and bank notification is also conducted only at the timing and scope per the owner's intent.

JFSC does not engage in high-pressure sales or push engagements against the owner's intent.

M&A is among the most important judgments in an owner's life — without emotional and logical acceptance, good outcomes do not follow. JFSC's policy is that the owner's withdrawal is free up to the end. If at any point the decision is "I want to cancel the transfer" or "I need more time," that is respected.

JFSC operates aligned with the SME M&A Guidelines (Small and Medium Enterprise Agency, 3rd edition, August 2024), with full attention to the owner's withdrawal freedom, proper information provision, and conflict-of-interest avoidance. JFSC's position is consistently to prioritize the owner's best interest.

If there is dissatisfaction or doubt about JFSC's handling, please raise it openly.

No problem. In fact, we encourage consulting multiple intermediaries and selecting the most trustworthy after comparing service content, staff character, fee structure, and buyer-candidate quality.

However, signing "exclusive intermediary contracts" with multiple firms simultaneously is generally not contractually possible — exclusive contracts grant a single intermediary buyer-exploration rights for a defined period, creating a double-contract concern.

At the initial consultation and engagement-review stage, JFSC does not restrict parallel consultation. At intermediary-contract signing, JFSC clearly explains whether the form is exclusive or non-exclusive for the owner to choose.

The SME M&A Guidelines also require, from the seller's option-preservation perspective, reasonableness of exclusive-contract period and clarity of termination conditions — JFSC's contract design follows this orientation.

Yes — consultation can be halted at any time. The owner's withdrawal is free up to the end.

Specifically, the owner's intent can stop the process at any of the following stages:

• After initial consultation — if not satisfied with service or fees
• After intermediary contract / before buyer-exploration launch — if circumstances or thinking change
• During candidate negotiation — if candidate conditions, character, or scheme do not fit
• After LOI signing — if unexpected issues emerge in DD
• Immediately before final contract — if not satisfied with final transfer consideration or conditions

Under complete success-fee, no fees apply if no deal closes (though external specialist costs incurred during the process may be billed separately).

Even if the engagement halts, the information organization and candidate-exploration experience up to that point serve as reference for future decisions. The decision to "halt" is itself a management judgment that JFSC supports.

M&A execution involves multiple specialists in distinct roles:

• M&A intermediary (JFSC) — buyer-candidate exploration and sounding, condition-negotiation progress management, overall engagement accompaniment, stakeholder coordination
• Tax accountant — share valuation (tax-purpose), tax DD, transfer-stage tax simulation, business succession tax regime application review, post-transfer tax return
• Attorney — contract drafting and review (NDA, LOI, SPA), legal DD, legal-risk identification, pending-litigation handling
• CPA — financial DD, enterprise valuation (economic value), accounting-validity confirmation
• Real estate appraiser — appraisal for real-estate-holding companies
• Judicial scrivener — shareholder-register organization, commercial registration (officer changes, headquarters relocation)
• Administrative scrivener — regulatory-license succession applications (real-estate broker license, construction permit, care provider designation, dispatch business permit, etc.) — central specialist for license-driven SME M&A

M&A is a comprehensive process that proceeds appropriately only with these specialists' coordination. JFSC's role is overall progress and stakeholder coordination — tax, legal, and accounting-audit judgments require the respective licensed specialist.

If the owner has in-house specialists (tax accountant, attorney), JFSC coordinates with them. Otherwise, JFSC refers specialists fitting the engagement.

Three main differences:

1. Engagement-size focus
Major firms organizationally handle mid-size company deals in the several billion yen range. JFSC focuses on SMEs from tens of millions to several billion yen, including small-scale, unprofitable, and rehabilitation-stage engagements, in a boutique style with careful accompaniment.

2. Advisor involvement
Major firms emphasize organizational and standardized progress management. JFSC adopts an individual-accompaniment model with one consistent advisor from initial meeting through closing.

3. Seller-accompaniment stance
JFSC strongly emphasizes the seller-owner's position. Complete success-fee, specialist coordination, and withdrawal freedom are all designed to minimize seller burden and risk.

Large firms favoring organizational scale and standardization, JFSC favoring individual accompaniment and flexible design — please choose what fits the owner's situation.

Founder & CEO: Yuichi Igarashi (五十嵐 悠一)

Graduated from the Department of Business Administration, Faculty of Economics, Kyoto University. At Sompo Japan Insurance Inc., engaged in corporate risk management and legal affairs, learning the essence of business succession and risk management through dialogue with SME owners. Subsequently, at a Tokyo Stock Exchange-listed M&A intermediary, engaged in SME M&A practice and completed multiple deals. Founded Japan Financial Strategy Center in 2020 from questioning the industry's "deal-completion-at-all-costs" orientation — aspiring to M&A advisory that protects the owner's true interest.

Specialty areas
SME M&A, business succession, real-estate M&A, business rehabilitation, enterprise valuation, due diligence, share transfer, business transfer.

Qualifications and registrations

• Professional CFO (Japan CFO Association certified)
• M&A Expert / M&A Advisor
• Registered M&A Support Organization (Small and Medium Enterprise Agency)
• Full member of M&A Support Organization Association

External contributions
Ongoing specialist column at BATONZ.

Company overview

• Name: Japan Financial Strategy Center, Inc. (JFSC)
• Established: May 19, 2020
• Headquarters: Nihonbashi-Ningyocho, Chuo-ku, Tokyo
• Business: M&A intermediary, business succession consulting, real-estate brokerage / consulting

Primary coverage areas

• SME M&A across real estate, construction, medical, care, retail, services, manufacturing — broad sectoral coverage
• Multiple schemes: share transfer, business transfer, intra-family succession, sponsor-type M&A
• Succession support for companies in difficult situations — no successor, unprofitable, debt excess
• Personal guarantee release negotiation under the Personal Guarantee Guidelines
• Coordination with specialist networks strong in real estate, regulatory licenses, and labor issues

Yes — M&A negotiation with a specific counterparty already in mind (known company, business partner, same-industry player) is supportable.

Even when the counterparty is determined, specialist involvement has significance:

• Objective term design — logical negotiation not swayed by emotion or relationship
• Tension from third-party presence — preventing vague agreements common among insiders
• Professional contract drafting — translating verbal agreement into legally binding contract
• Tax and legal risk identification — issues easily missed by parties (off-balance debt, labor issues, contract succession)
• Transfer consideration validity verification — avoiding excessive discount or overpricing without market sense

M&A between acquaintances has fast agreement processes but is also prone to post-closing "this is not what I expected" troubles. Third-party specialist involvement protects the parties' long-term trust while enabling appropriate term design.

"Negotiation-support only" engagements without buyer exploration are flexibly designed including fees, individually quoted per engagement size, complexity, and required specialist-coordination scope. Please make contact first.