The investment team worked closely with us and supported the dramatic growth of our company.

Kunihiro Morita

President and CEO

ALC Corporation

Kunihiro Morita

Can you tell us about your company and its struggles?

Management and financial difficulties

We are an imported-car dealer in Shizuoka, Kanagawa, and Tokyo areas. We also provide car maintenance services.

The brands in our inventory include special and luxurious names like Ferrari, BMW/BMW MINI, LAND ROVER, PEUGEOT, FIAT, and Harley Davidson. We have built good relationships with numerous customers since we started our business in 1988.

Before the team from Daiwa PI Partners (DPI) came in to support, we had problems with management and financing.

We were seeing an increase in sales as we added more brands on our catalogue, but problems with inventory management and investments on non-core items were making the cash flow worse. We also had poor financial planning that resulted in dozens of loans that had become a financial and administrative burden.

Kunihiro Morita

What was the support like?

Drastic improvements in profitability and cash flow gave us power to accelerate M&A strategies

DPI's equity participation started in 2016, and Mr. Tamazawa, Mr. Sezai, and Mr. Shibahara came from DPI to serve executive roles.

Since then, we receive constant support on a daily basis from the team. They not only participate in meeting of board directors and other executive meetings, but they also provide us with insights on management and our capitalization table. Mr. Sezai and Mr. Shibahara are working really closely with us here in our office.

Visualizing management

Our first task was to visualize our company's management. This was part of the process of developing a medium-term management plan with DPI.

At the time, it took months to analyze our performance, and the accuracy was not satisfactory either. So, we refined our management and accounting systems with DPI, and now we can see real-time data. With this improvement, we built a KPI management system that can keep track of the profit per sales and inventory.

Building financial strategies

Our next challenge was to reorganize our financial structure.

We struggled with dozens of corporate loans as with did not have a concrete financial strategy before.

Based on the medium-term management plan we created with DPI, DPI guided us through negotiations with financial institutions to consolidate our debts into a single, syndicated loan. This process not only reduced the interest payment or our staff's administrative workload but also provided us with enough funds for our capital expenditure.

Accelerating M&A

All of this paid off, and we were able to strengthen our profitability and improve the cash flow. We were heading into a more proactive M&A strategy by 2018.

We are currently executing at least one M&A transaction every year. DPI's one-stop support includes sourcing the target company, scheme planning, funding, negotiation, and PMI after the execution. We acquire some companies in deficit as well, but we are successfully transforming all of them to be in the black after a year from acquisition.

We feel that we are getting more capable in M&A and performance improvement of the acquired companies. Further inorganic growth is now our aim.

Kunihiro Morita

What is your next move?

Becoming the most "special" car dealer in Japan

Our revenue is annually increasing by 14% on average for 5 consequent years. We have evolved into a financially solid company with high profitability and stable cash flow. The number of employees doubled from 200 in April 2016 to 410 in March 2022, and I'm proud that we are creating jobs for the local community. These achievements would not have been possible without DPI's support.

I'm not just talking about performance when it comes to working with DPI. I think it's important that we give ourselves a purpose in our activities. It's vital to understand that a healthy corporate culture is the key to a sustainable growth of the company, and we always need to keep in mind the value of proper corporate governance, compliance with the law, and having robust internal controls. We share this philosophy and practice it with the team from DPI.

We also need to pay attention to the markets' needs, constantly trying to improve customer and employee satisfaction.

Our motto is "to deliver special products to our special customers as a special company".

We should never stop making efforts as specialists to gain trust from our customers, to be an essential part of the society, and to position ourselves as an extraordinary company among all stakeholders.

So, I say that we must keep trying to become the most "special" car dealer in Japan.

And I believe that this strong partnership with the team from DPI is the way to reach that goal.