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#1 Neural Marketing Inc.

"It wasn't about scale, I entrusted everything to Neural's 'enthusiasm'" The reality of owner company M&A, a decision made to protect a family business.

Masafumi Ueda, Executive Managing Director, Neural Marketing Inc.

Masafumi Ueda

Executive Managing Director, Neural Marketing Inc.

With a unique career background as a former comedian, Executive Managing Director Ueda returned to the family business in 2019. Breaking away from family management, and to overcome the pressing issues peculiar to owner companies such as inheritance tax and personal guarantees, the company chose to join Neural Group. In a rapidly changing environment, they achieved "ideal generational change" by making the organization white-collar without losing a single employee, and furthermore, having a homegrown employee take office as the new president this year. We asked him about the reality of owner companies and his vision for the future after joining the group.

Transition from Comedian and Direction Shift Amidst Family Management

I originally started my career as a comedian. At the age of 21, I had the opportunity to appear on TV programs like "Waratte Iitomo!", and at that time, I was determined to live my life as a comedian. On the other hand, I also started my own businesses such as restaurants, experiencing the severity of management firsthand at a young age.

The turning point came in 2019, when my father, the founding president, turned 60.

There had been talks of business succession within the company for some time, and my brother, who had once left after experiencing the launch of the Tokyo branch at the predecessor company, and I, who was working as a comedian, shared the same vision of the future without putting it into words: "Let's return at the same time and support our father's company together." The timing matched perfectly, and we joined together in 2019.

However, when we actually got inside, there were difficulties peculiar to family management. Conflicts became constant as feelings as a family, outside of business, were brought into management. As a result, my brother chose to leave the company again. In my father's mind, there was an absolute picture of "the two brothers joining forces to succeed the business," so with one of them gone, the option of straight business succession to relatives practically disappeared. From there, a new challenge of M&A began.

Executive Managing Director Masafumi Ueda answering the interview

The Wall of Inheritance Tax and Personal Guarantees due to Family Management, and the Reason for Choosing Neural's "Enthusiasm"

When I first heard the option of M&A from my father, I remember feeling a stronger sense of agreement, like "I thought so," rather than surprise. This is because trying to pass an owner company that has grown to a certain size onto relatives or internal members imposes a very heavy, real risk that cannot be seen from the outside. The challenges we faced at the time were largely divided into two.

One was the "huge inheritance tax risk." Because the company's enterprise value was highly evaluated, if we tried to inherit it as is among relatives, we would practically have to pay cash in the scale of billions of yen as inheritance tax, and there was a harsh scenario where the company would shoulder a huge debt the moment it was taken over.

The other was the "risk of an overly heavy personal guarantee" accompanying transactions through credit companies. Since the representative director personally bears all personal guarantees for debts amounting to billions of yen, even if we tried to succeed the business to excellent employees within the company, my father, as a manager, could not possibly impose such an enormous risk on anyone other than a relative.

As a result, in order to maintain a sustainable company while protecting the company and its employees, M&A, where a partner with a solid foundation takes on responsibility along with the business, was the most rational choice.

Thankfully, we received many high-priced offers from major manufacturers, investment funds, and competitors. However, operations based on short-term sales by funds, the risk of losing our own path by having the initiative seized by a competitor, or the fear that the existing sales department would be dismantled, all remained offers that could threaten the "happiness of the employees we have walked with."

Among them, we chose Neural, which was smaller in scale than our company at the time. My father saw through the overwhelming enthusiasm, determination, and gritty guts of the management team to create a great future together, even going into debt, and decided to integrate with the conviction that "we can entrust everything to this company."

Executive Managing Director Masafumi Ueda speaking

The Transition Period Where No Employee Quit, and the Dramatic Evolution of the Work Environment and Hiring

I was also aware that joining the group would force major changes on employees from a management standpoint. Since the environment changes completely from yesterday, all employees must have had great anxiety. I simply continued to convey earnestly, exhausting my words, on that one point: "It will definitely get better from here."

As a result, no employee, including the upper management at the time, quit the company. My father, the founding president, retired, but the fact that the existing management layer, including myself, remained on the front lines without anyone leaving and ran alongside them, prevented a chain reaction of anxiety and gave a strong sense of security.

The changes since joining the group have been truly dramatic. First, from a work environment that was originally an irregular one-day to bi-weekly off system with Saturday work, we shifted to a complete two-day weekend system in accordance with the strict compliance of a listed group. Employees can now appropriately use paid leave, and employee satisfaction and peace of mind have risen significantly. Simultaneously with this shift to a two-day weekend system, we changed our company name to "Neural Marketing" and took a new step forward. This produced an explosive effect on the hiring front as well, dramatically increasing the number of applicants for job openings, and hiring became successful.

Also, by obtaining abundant backup as a group, we were able to launch multiple new business departments that we had been preparing since before the M&A. Being able to step on the sales accelerator against the major corporate market, which we couldn't step into under the previous system, backed by the creditworthiness of a listed group, is a very big synergy.

Of course, a new sense of tension was born, such as a "pressure of not being able to fail" due to listing rules and thorough commitment to numbers, but I view it positively as a necessary change for the organization to mature and for each individual to evolve as a professional.

Masafumi Ueda, Executive Managing Director, Neural Marketing Inc.

The Birth of a Homegrown President, and Toward the Future of Group Management

And this year, our company reached a major milestone. We transitioned to a new system where Mr. Ishigaki, a homegrown employee who rose through the ranks and supported the front lines for many years, took office as the new president, and I, as the executive managing director, support that strategy.

From the former "strong top-down management by the founding president," through M&A to "organizational management using the mechanisms of a listed group," and now, a leader who knows the front lines better than anyone else stands at the top. I am proud that this is the ideal form of generational change and systemization brought about by M&A.

For employees as well, we were able to show an incomparably big dream that "if you honestly accumulate achievements in your own company, you can stand at the top of a major company of a listed group."

Also, as the number of group companies increases, we can frankly share and help each other within a trusted group of peers with behind-the-scenes things that independent owners cannot reveal to each other. Precisely because if any one company sinks, it will chain to the whole, a high perspective to improve the whole is naturally acquired. In the future, even when a company in an unknown field we have yet to see joins the group, I would like to actively participate in management as my own growth opportunity.

I think many business owners considering M&A have various worries, such as business hitting a ceiling, the limits of internal reform, or walls to relative succession like ours. If there is even one issue that "we cannot make our employees happy with a greater sense of speed or jump the business up to the next stage with our power alone," M&A will be the best choice.

There is no need to shoulder all responsibilities alone. While sharing great responsibilities with trusted peers, utilize your own strengths to step on the accelerator of the business. That decision makes the company many times stronger.

By all means, let's create a new future together with us.

Group photo of Executive Managing Director Masafumi Ueda and employees of Neural Marketing Inc.