Analysis: Japan's stay-at-home firms finally spread their wings

Mon Feb 6, 2012 3:13pm EST
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By Junko Fujita

TOKYO (Reuters) - Japanese companies are again venturing offshore, and this time a new breed of business is striking deals overseas.

Japan Inc splurged a record $70 billion on foreign acquisitions last year, taking advantage of a strong yen, big cash reserves, attractive valuations and some willing sellers, especially in Europe.

Many of these Japanese acquirers are already multinationals but a growing number are embarking on their first big foreign adventure, a trend that partly reflects two longer-term factors: a stagnant domestic economy and a shrinking population.

"We want to keep growing," said Hitoshi Motohara, managing executive officer of Recruit Co, Japan's largest recruitment firm, which was founded in 1963 but has only begun in the last two years to really make major bets on offshore markets.

"Having had control of a dominant share in Japan, we have to seek the next opportunity somewhere else," said Motohara, 54, who leads the unlisted firm's expansion in the United States, the world's largest recruitment market.

In January, Recruit bought Advantage Resourcing America and Advantage Resourcing Europe for $410 million in its third foreign deal since 2010, giving it a global footprint.

"If there is a good opportunity, we want to conduct more acquisitions in the U.S.," Motohara said by phone from Norwood, Massachusetts. "A company based in the U.S. with global presence would be ideal."

Recruit is one of a growing number of previously stay-at-home businesses looking to spend more of their capital offshore.   Continued...