JAFCO and RD Support Form Partnership for Business and Technology Succession in Healthcare and Life Sciences

JAFCO Group Co., Ltd. (JAFCO) and RD Support Co., Ltd. have launched a partnership aimed at resolving challenges related to business and technology succession in the healthcare and life sciences sectors.

Under this partnership, JAFCO's Business Investment Department, which specializes in buyout investments, will lead efforts to identify business succession opportunities and strengthen post-succession management support structures. Simultaneously, RD Support will leverage its specialization in the healthcare and life sciences sectors to support the acquisition of R&D talent and the utilization of professional human resources, helping to solve challenges such as technical knowledge transfer and the restructuring of R&D systems that frequently arise during succession.

Background and Objectives There are 500,000 medium-sized companies in Japan, with an approximate 50% rate of companies lacking a clear successor. This is particularly prevalent in the healthcare and life sciences industries—including food, health food, cosmetics, pharmaceuticals, and medical devices—where an aging founder and management generation face imminent succession needs. Many long-standing companies, which hold unique technical expertise and formulations developed over years, face complex challenges in selecting successors and research leaders, establishing new organizational structures, and maintaining R&D functions during the transition.

In business succession, competitiveness depends not only on management transfer but also on how R&D knowledge is passed down. Intent behind formulations and development judgment criteria are often not documented, accumulating as 'invisible assets' dependent on specific individuals. Common problems include:

- No successor within the company. - Undefined selection and roles for research leaders. - Reliance on specific individuals for formulation intuition and quality standards. - Development priorities and investment decisions based on individual intuition rather than company logic. - Lack of clarity on what to maintain or change in the new organizational structure.

These challenges are common whether the president is being replaced (requiring secure successor and leader selection, and structural design for technology transfer) or staying on (requiring the introduction of new technical knowledge and R&D system renewal). This partnership aims to solve these succession-related challenges to ensure sustainable company growth.

Overview of Partnership This collaboration will accelerate the growth of companies in which JAFCO invests by combining the human resource support functions of RD Support with the management support capabilities of JAFCO’s Business Investment Department.

- RD Support: Specializes in healthcare and life sciences, offering R&D talent recruitment support, shared professional personnel utilization, and diverse support tailored to R&D challenges. - JAFCO Business Investment Department: Offers nearly 30 years of buyout investment experience and growth support through collaboration with the venture investment division.

Specific Support Details - Construction of Post-Succession Structures: Supporting the selection of successors and research leaders, and the design of roles for the new organizational structure. - Technology and Know-How Succession: Connecting 'invisible assets'—such as formulation secrets and quality standards—to the next generation by securing necessary talent and designing the handover process. - Onboarding Support for New Systems: Facilitating the smooth operation of new management systems, whether the president is replaced or stays on, by combining recruitment and professional personnel utilization. - Restructuring for Growth: Building systems to support future growth by securing core R&D talent and utilizing professional expertise for specific technical challenges.

Future Outlook RD Support and JAFCO aim to move business succession beyond a 'defensive handover,' supporting the transition for companies across Japan by addressing management, talent, and technical succession challenges simultaneously to enable the next stage of growth.