オンデック

M&A advisory firm that benefits from intensifying business succession issue

Providing M&A Advisory Services to Small- and Medium-sized Companies
ONDECK based in Osaka provides M&A advisory services to small- and medium-sized domestic companies.

The company is aware that M&A services targeting small- and medium-sized companies tend to result in just matching buyers and sellers. It draws a clear line from such M&A services targeting small- and medium-sized companies by providing quality proposals focused on business success after the M&A.

The company’s M&A advisory business is performed in either a broker style in which it brokers between potential buyers and potential sellers, or in a financial advisor style in which it gives advice to either potential buyers or potential sellers as a financial advisor. Most of the net sales are from the broker style.

Revenue Structure
The revenue of the company is composed of (1) an initial retainer fee paid by potential sellers at the sourcing/project formulation phase, (2) an application fee and fee to express their intention paid by potential buyers at the matching phase, and (3) a success reward paid at the execution phase. The initial retainer fee, application fee and fee to express their intention are fixed amounts, and most of the revenue is from success rewards.

Size of M&As
Many of the M&As the company handles are so-called small-cap companies with annual turnover between 300 million yen and 1 billion yen, but it also corresponds to mid-cap companies with annual turnovers of over 1 billion yen and micro-cap companies with annual turnovers of less than 300 million yen.

Regarding distribution of M&As in the fiscal year ended November 2019, it is centered on micro-cap and small-cap companies based on number of cases. However, as mid-cap companies, which only accounted for 12% based on the number of cases, accounted for 45% on a monetary basis, the quantity of M&As of mid-cap companies tends to have a large effect on its business performance.