Bain Capital agreed to a 510 billion yen (around $3.4 billion) deal to acquire 300-year-old Tanabe Pharma in what is Japan’s biggest PE healthcare deal yet. The agreement comes on the heels of a record year for foreign capital participation in the country as overseas investors hunt for undervalued companies.
Tanabe Pharma, the pharmaceutical unit of Mitsubishi Chemical Group, was founded in Osaka in 1678 and develops therapeutics for immuno-inflammation, central nervous system disorders and oncology, according to its website.
The investment was led by Bain’s private equity and life sciences team. Ricky Sun, a partner at Bain Capital Life Sciences, said in a statement that healthcare in Japan shows promising signs for growth with the government’s initiatives to accelerate the approval of innovative medicines.
While the value of PE investment in Japanese healthcare fell from a $6.1 billion peak in 2020 to less than $1 billion in 2022, PitchBook data shows that it bounced back to $3.5 billion last year across 20 deals. This latest deal alone already puts 2025 on a course to beat last year’s total.
Previously, Bain Capital also partnered with Ergo Partners to take medical support company Nichii Gakkan private for $2.1 billion in 2020. Other significant deals include Blackstone‘s $2.2 billion buyout of Alinamin Pharmaceutical in 2021 and then its exit in another $2.2 billion deal to MBK Partners in 2024.
PE deals in Japan with foreign PE participation reached an all-time high last year, with overseas investors taking part in 57 deals, up from 41 in 2023. The country is becoming more attractive to overseas investors due to both corporate governance reforms and investors in Asia diverting capital away from China. Deals have also been cheaper as the yen remained relatively weak against the dollar, according to PitchBook’s 2024 Japan Private Capital Breakdown.
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