Consecutive Transactions with MDI including M&A Advisory

Finance Arrangement + Bulk Property Sales + M&A

Overview

Due to the ripple effect from the Suruga Bank Scandal and Leopalace Incident, lending to individual investors became tight, and disposition of rental apartment buildings to individual investors slowed down.

MDI management team’s prompt decision and action has successfully led it to achieve funding, lightening its B/S and reviewing its business model including M&A in just 7 months.

Samurai supported MDI by providing solutions from many different perspectives.

Phase 1 (March 2019）
Liquidation of rental apartments through the Inter-Trust Loan Scheme

MDI wanted to diversify its ways of funding as exit to individual investors continued slowing down. However, since rental market of residential properties maintains a good shape and cash flow is highly stable, MDI didn’t want to rush to sell the properties with deep discounts.

Samurai suggested Inter-Trust Loan Scheme, which enables MDI to buy time to sell assets with the similar profit margin as before.

In addition to the financial arrangement, Samurai took charge of the AM.

Phase 2 (May 2019）
Bulk sales of newly developed apartments

The credit stance of financial institutions has become more stringent, and MDI wanted to quickly increase its cash position.

MDI lightened its B/S and raised its cash position by multiple bulk property sales.

Samurai fund acquired 13 of the new MDI developed apartments and took charge of the AM.

One of the largest apartment building developers in Japan.
Manages over 3,000 apartment buildings with over 37,000 rental units in Japan (as of March 2019).
Phase 3 (September 2019）
M&A transaction by Softbank Group and OYO

Softbank Group and OYO Life Group (OYO), one of the portfolio companies of Softbank Vision Fund, acquired MDI.

MDI was under business restructuring and searching for a new sponsor as their cashflows were deteriorating rapidly.

OYO had an ambitious target of managing one million rental units in Japan. To meet their target, they were searching for a company to acquire and expand its business.

At the age of 19, Ritesh Agarwal founded OYO in 2013 and became the world’s second largest hotel operator in just 6 years.

One of the unicorn companies with a market cap of about $10 billion (as of November 2019) that Softbank Vision Fund invests.

*2019年11月現在