Monstar Lab Acquires 100% of Hanoi-Based Japan-Focused Offshore Developer LIFETIME Technologies

Deal Overview

Monstar Lab, Inc. (headquartered in Meguro-ku, Tokyo; President and CEO Hiroki Inagawa) entered into a capital alliance with LIFETIME Technologies Inc. (hereinafter, "LTT"; President Masahiko Matsunaga), a Hanoi-based enterprise systems development firm, acquiring 100 percent of the company and bringing it into the group as a wholly-owned subsidiary. The transaction was announced on September 28, 2016. LTT was a registered partner of Monstar Lab's global sourcing platform, Sekai Lab, and this transaction represented a characteristic move in the Monstar Lab strategy of evolving partnership relationships into capital relationships.

This transaction is included here as an example of the prior principal experience of our team. Prior to founding WellBear, our Co-Founder Yuta Sakurai led this deal in his role as the internal M&A lead at Monstar Lab. This is not a WellBear advisory engagement, but rather a representative example of our team's operator-side experience executing cross-border M&A in Vietnam. Sakurai acted end to end as the internal principal: deal structuring, valuation, negotiation, due diligence, contract execution, and closing.

Deal Summary

• Acquirer: Monstar Lab, Inc.
• Target: LIFETIME Technologies Inc.
• Location: Target HQ in Hanoi, Vietnam. Acquirer HQ in Meguro-ku, Tokyo
• Industry: Enterprise Systems Development / Offshore Development
• Structure: 100 Percent Acquisition via Capital Alliance
• Our Team's Involvement: Principal
• Announced: September 28, 2016

About LIFETIME Technologies (LTT)

Founded in June 2005 and headquartered in Hanoi, Vietnam, LIFETIME Technologies is a Japan-focused Vietnamese offshore development firm with a distinctive positioning. At the time of this transaction, LTT employed approximately 80 engineers and had established a unique market position in Vietnam. Three characteristics set the company apart. First, as a firm dedicated to Japanese clients, LTT had built deep organizational understanding of Japanese business practices. President Masahiko Matsunaga brought more than two decades of leadership experience across Asian offshore development, starting at Information Technology Development Co., Ltd. and serving as offshore development lead from 2006 onward, before taking on the CEO role at LTT in 2012. Second, the company had built a high-caliber engineering team, with approximately 30 percent of its engineers graduating from Hanoi University of Science and Technology, the leading technical university in Vietnam. Third, despite Vietnam's highly fluid labor market, roughly one third of LTT's employees had tenure of four years or more, an unusually high retention rate that reflected a loyalty-oriented culture and provided a foundation for stable, reliable delivery to clients.

About Monstar Lab

Monstar Lab is a Japan-founded digital product development firm built around a distinctive global sourcing model. At the time of this transaction in September 2016, the group comprised 130 domestic and 600 international engineers and creatives across 6 countries and 11 cities (Tokyo, Osaka, Matsue, Chengdu, Qingdao, Shanghai, Hanoi, Da Nang, Singapore, San Francisco, and Dhaka). The Sekai Lab platform had registered approximately 100 partner development companies across 18 countries, and Monstar Lab was actively pursuing a strategy of selectively evolving these partnerships into capital relationships.

The Combination

This transaction addressed a strategic imperative that had emerged as Monstar Lab scaled: the need for in-house capability in enterprise systems development.

Since its founding in 2006, Monstar Lab had developed more than 800 IT services, primarily in mobile applications and web services. As the business grew, engagements involving larger-scale IT services and backend-heavy enterprise systems became increasingly frequent, and securing an in-house team capable of serving these demands became a strategic priority.

The 100 percent acquisition of LTT delivered enterprise systems capability to the group, enabling Monstar Lab to serve web service projects with significant backend requirements. The acquisition also represented Monstar Lab's second Vietnam-based group company following the 2015 integration of AsianTech in Da Nang, achieving geographic diversification within Vietnam itself (Da Nang and Hanoi). More broadly, this transaction was the opening move in a sequence of investments focused on enterprise systems capability, continuing three months later with the acquisition of Ideyatech in Manila in December 2016.

Continuity

LTT continued to operate under the leadership of President Masahiko Matsunaga, with its brand, organization, and Japanese client relationships maintained. Its core strengths, deep understanding of Japanese business conventions, engineering talent from Vietnam's top technical university, and exceptional employee retention, were preserved as competitive advantages post-closing, giving the company a stronger platform to take on larger and more technically demanding engagements within the Monstar Lab group.

This entry is based on publicly available information (Monstar Lab, Inc. press release dated September 2016). Non-public transaction terms are not disclosed.