The Goal: Maximize Market Capitalization
Aiming to Increase the Presence of Amvis in Japan and Abroad
Director and CFO
Mr. Nakagawa passed the CPA exam while attending the University of Tokyo, where he studied at the Faculty of Law. After graduation, he worked at PricewaterhouseCoopers Arata (currently PricewaterhouseCoopers Arata LLC), PricewaterhouseCoopers Co. (currently PwC Advisory LLC), Morgan Stanley Japan Holdings, and Morgan Stanley New York. After that, he joined Amvis as CFO.
Tetsuya Nakagawa, Director and CFO, has a unique background, not only in our company but also with the medical and nursing care industry more broadly. He passed the CPA exam on his own while in university, and went on to work at an auditing firm, a consulting firm, and an investment bank. After that, he became CFO of our company at the young age of 31, even though he had no experience working at an operating company or in the medical or nursing care industry.
Although in retrospect he appears to have effortlessly fast-tracked the elite course, he says this is not actually the case. He explains, “I have built up my career not by thinking backwards from a future vision, but rather by setting goals and striving to achieve them, prioritizing what I perceive as ‘interesting’.”
He joined our company because of an unexpected opportunity. When he was looking for a new job, he received a scout email from Amvis Holdings, and the company name caught his attention. When he looked into the company, he found that its performance was growing steadily and the financial figures were attractive. When he asked friends, relatives, and other doctors around him about the company’s business model, they all agreed that there was a high demand for the business and that it was likely to continue growing. He realized that Amvis was a rare operating company.
He was so interested in Amvis that he decided to interview with us, even though he had never thought of working at an operating company before. He brought a business plan for our company prepared in his own way and discussed it with the CEO at the interview. When discussing the business and future prospects, he was attracted by the broad-mindedness and personality of the CEO. This impression led him to make a dramatic shift in direction, turning down another job offer and joining an operating company that he had never before considered.
Since joining our company, Mr. Nakagawa has been in charge of accounting, finance, and IR as CFO, as well as managing a wide range of departments (such as recruitment and opening support) to reinforce the headquarters functions. Since he joined our company, our name recognition has increased among investors, and market capitalization has more than tripled.
“The goal now is to maximize our market capitalization. I want to enhance our business and get us recognized in the global capital markets,” Mr. Nakagawa said.
How does he plan to maximize market capitalization and make ours a globally recognized company?
The Lure of M&A Led Him to an Investment Bank
When Mr. Nakagawa feels something is interesting, he pushes ahead until completely satisfied he has reached his objective. Ever since he was a new graduate, his path has deviated from the norm. He started working for a major auditing firm, but auditing work alone was not enough for him, so he soon became involved in consulting.
This move had an impact on his later career. He worked as an M&A accounting advisor and became fascinated with M&A. “One of my most memorable cases was the acquisition of a small factory for a large sum of money. The owner of the factory gave up the factory, but became wealthy. I couldn’t help but wonder why valuation worked the way it did,” he said. As he learned more about the theories and methods of corporate valuation, he became more absorbed in the subject.
He decided to become a financial advisor (FA) for M&A and chose to work at an investment bank. FAs provide exclusive support to sellers and buyers, handling everything from M&A planning to contract signing and closing. At an investment bank, you can be involved in large-scale deals on a global level.
After changing jobs, Mr. Nakagawa joined a group in charge of financial institutions, aiming to become a top FA, and worked hard, handling 4 to 5 M&A and financing deals and 4 to 5 sales clients at any given time. Even for a single M&A transaction, there are many parties involved and many emails to be sent. With a limited schedule, he had to consolidate information, make evaluations and judgments, solidify the schemes, and move forward.
Furthermore, many of the projects he was assigned to were acquisitions by Japanese companies of overseas firms, which were big deals for the client. This put him under a lot of pressure. In parallel with such FA work, he brought business plans to the clients and proposed plans to them. He also worked hard to build contacts with corporate executives by providing support for domestic and global IR activities.
It was truly hard work every day. Even so, he enjoyed his work and felt no hardship. “In M&A, there are exciting tasks such as valuation and negotiation of terms. That’s why I didn’t care how busy I was,” he said.
The Next Challenge: “Grow the Company I Believe in with My Own Hands”
In this way, Mr. Nakagawa handled an amazing amount of work; he was involved in more than 10 announced M&A and financing deals in 3 years. He was transferred to the New York headquarters, achieving top performance among his peers, just has he had originally intended.
At the New York headquarters, he experienced the US approach to M&A, which emphasizes quantitative evaluation. This was a positive development for him; he was good at creating valuation models, but he also felt the cultural differences and language barriers in sales. Just as he was thinking, “I’ll go back to Japan after I’ve completed my studies, and I’ll grow even more,” the topic of work style reform came into the spotlight, and he decided to shift his career toward a different field.
As mentioned above, it was around this time that he learned of Amvis via from a scout email. The company’s performance had continued to grow since establishment, and its business model was excellent. He understood that the hospice business had the potential to become an indispensable part of communities in an era of changes of medical care from hospital-based to community-based, and he believed the business made a strong social contribution.
Mr. Nakagawa said, “There are very few venture companies nowadays that meet the following criteria: outstanding growth potential, high social contribution, and solid profits.” From an investor’s point of view, he was convinced that our company’s stock price would grow. Taking this line of thought one step further, he wondered if he could increase the market capitalization of a company he believed in through his own involvement. He didn’t know if he could actually realize this goal, but he felt it was a meaningful challenge that would test the validity of his views and skills. He was thrilled to find a new challenge that he found “interesting.”
So, he prepared our company’s financial statements and business plan and presented them to the CEO at the interview. He showed how he could make our company grow significantly. “The CEO listened attentively to my presentation, he might have considered cocky, as this was our first meeting,” he recalled. Through the discussions, he was attracted by the CEO’s intelligence and broad-mindedness.
Meanwhile, the CEO saw potential in him, even though Mr. Nakagawa had no experience working at an operating company or in the medical and nursing care industry. Mr. Nakagawa joined the company as CFO.
Achieved in 1 Year What He Had Expected to Take 2
Of course, not all was smooth sailing for the young CFO. The first thing he needed to do was to gain the trust of the people around him by working harder than others and getting results. He started by reviewing journal entries and preparing internal and external documents from scratch.
He then restructured the accounting department, reorganizing workflow and roles and strengthening the personnel structure. Now, the staff of the department prepare the disclosure materials, and Mr. Nakagawa only has to manage the progress and conduct the final review. He says, “Ideally, I would like to create an organization where members can run on their own by delegating authority after I have created the structure.”
He is also steadily advancing his mission of “maximizing market capitalization,” which he set when he became CFO. In addition to securing funds through capital strategies such as the issuance of new shares in February 2021, which will be used to accelerate business expansion, he is also focusing on IR. In the past, our company had not sufficiently able to reach out to overseas investors through IR meetings. Now, we use various methods to contact overseas investors, who now account for 70–80% of around 100 investors so we meet with each quarter. We have also started to provide information in English on our website.
In addition, although our company had not clearly stated its medium- to long-term plan before, it then took the step of announcing “Amvis 2023.” This three-year plan contained targets for the number of facilities and business performance, which we announced along with financial results for the fiscal year ended September 30, 2020. The company’s recent strong performance and its stable future outlook led to a strong market evaluation and a sharp rise in the stock price. Since then, the stock price has maintained an upward trend. In addition, we revised our Amvis 2023 targets upwardly after the financial results for the fiscal year ended September 30, 2021 (see the IR Library for details).
As a result, in just 1 year our company exceeded the targets Mr. Nakagawa’s plan (the one he prepared at the time he joined us) had initially predicted would take 2. He said, “With our business model, the stock price would have grown even without focusing on capital strategy and IR. However, I believe that I was able to help accelerate the timeline by 1 year.”
From a Leading Company to a Globally Recognized Company
Although Mr. Nakagawa has already achieved a certain level of success, he wants to go even higher. As proof of this, he is now in charge of a wide range of departments, including not only accounting, finance, and IR, but also recruitment and opening support.
In the area of recruitment, he has developed a model for setting highly accurate hiring targets based on on-site needs such as utilization rates and staff shifts. It is now clear how many people need to be hired at which facilities and by when, making recruitment operations efficient. In other areas as well, he has identified the factors that hinder efficiency and has built a new structure to reinforce headquarters functions.
If we can consolidate our hospice business and solidify our financial base, we will have the capacity to further contribute to solving social problems through our second and third businesses and give back to society. We will clarify our position as a leading company in the hospice business and develop new businesses to become a globally recognized company. He has high goals.
First, we plan to expand our business in areas where we can expect synergy with the Ishinkan business. Our company has already realized the opening of Ishinkan under a new scheme through cooperation with care facilities. “The medical and healthcare industry will grow significantly in the future, and there are unmet needs and social problems. The medical industry, in particular, has been stagnant due to COVID-19, but there is a need for more new movement. We aim to enhance our presence in the world through businesses that lead to the solution of problems,” Mr. Nakagawa said.