A pharmacist with 15 years of experience took over a dispensing pharmacy founded in 1975 — the deciding factor over a competing bidder, and a loan from her father

Opening a dispensing pharmacy requires a full package: a property, equipment, drug procurement, and relationships with referring clinics. Building all that from zero takes years, and patient volume is unpredictable for the first few. The protagonist of this case, Asuka Kato, replaced that entry point with M&A. In February 2024, as an individual with 15 years of experience as a pharmacist, she took over Hirai Pharmacy Ltd. in Kanagawa Prefecture, which had been operating since 1975. The transfer price is undisclosed, but the source of her funds and the reason she prevailed in a head-to-head contest against a multi-store operating company are both revealed.

The skeleton of the succession

Why “succession” rather than “opening a new store”

Kato’s starting point was a drive toward independence. “I had always worked as a pharmacist, so I thought it would be great to be able to run a dispensing pharmacy leveraging that skill.” So far, this isn’t unusual as a pharmacist’s career. Where things diverge is in how she chose her means.

“I thought it would be easier to take over a company that already had some sales data and such in place, rather than starting fresh.” — this one sentence is essentially the whole of the decision. In the dispensing pharmacy business, demand is dictated by the flow of prescriptions. Sales are almost entirely determined by how many prescriptions come in from nearby medical institutions, and that’s hard to predict before opening. If you buy a pharmacy that has already been running for 49 years, the largest variable you’d otherwise have to predict already exists as an actual measured value. What Kato bought, put differently, was less a storefront and a license than verified sales data.

Her 15 years of work experience, including holding manager-level roles at multiple companies, isn’t unrelated either. For someone who understands the practical side of operations, taking over an existing store means not “learning something unfamiliar” but simply “switching to doing what you already know, under your own discretion.” This is the decisive difference from small-scale M&A done by someone without experience.

The decisive factor was a single word: “expansion, or continuity”

This deal had one other strong buyer candidate besides Kato, a company already operating multiple stores. On paper, they’d appear to be superior to the individual Kato in both financial strength and operational structure. Yet the sellers, Mr. and Mrs. Hirai, chose Kato.

What split the decision was a difference in purpose. The other company’s aim was “to further expand the business,” while Kato’s was “to have and run a pharmacy as an individual.” Kato herself recalls, “I later heard that the two of them were initially somewhat split in opinion, but in the end they chose me,” and analyzes the reason for the selection: “Perhaps they judged that I was the more suitable candidate in terms of wanting to inherit what’s already here as it is and grow it.”

And what’s explicitly noted as a point both sides agreed on is the sentiment: “Even after the M&A, we want to keep valuing our staff just as before.”

This is the turning point of this case, and at the same time an illustration of the structure in which small-scale M&A pricing isn’t decided by amount alone. For a couple who had run a pharmacy for 49 years, the transfer was more than monetizing an asset. It was also an act of deciding where the workplace they built would go. Whether the buyer treats it “as one piece in an expansion” or “raises it as it is” hits the seller’s satisfaction directly. Being an individual is a disadvantage for the buyer on the financing side, but it’s structurally advantageous in the message “I’ll inherit it as it is.” Kato was standing in the spot where that asymmetry worked in her favor.

She hit a wall on funding, and solved it through the intermediary

Funding, though, did present a real wall. The acquisition funds were secured through a loan from her physician father, but fully covering everything including operating funds was difficult, and she also considered financing from a financial institution. It’s recorded that there was initial difficulty getting a loan application approved under the M&A framework. Financing for opening a new business has established systems, but financing to buy an existing business is an area difficult even for the reviewer to assess.

The intermediary resolved this. After consulting with Ouchi of San Advisory, the loan came through. In the debate over where the value of paying an intermediary fee lies, this point offers a concrete answer, the intermediary’s value lies not just in matchmaking, but also in getting the buyer past a financial-institution barrier they couldn’t clear alone.

Borrowing from family, it must be said frankly, has low reproducibility. Whether you have a physician for a father isn’t something you can choose. When generalizing this case as “even individuals can buy a pharmacy,” this point shouldn’t be skipped over.

What she tackled first after taking over: going digital

Among the initiatives listed after taking over, what stands out isn’t flashy customer acquisition tactics but the quiet digitization of operations. Digitizing what had been a handwritten attendance sheet, introducing a payroll system, and introducing a prescription inventory management system, said to be underway.

Her approach shows consideration. For veteran staff, she “started with easy things, and had them realize the value of using digital tools while feeling things like ‘this got easier’ or ‘this is more convenient,’ progressing little by little.” When an outside owner steps into a workplace that’s continued for 49 years, it matters that the first move wasn’t “a rallying cry for efficiency.” In a deal where both seller and buyer agreed on “valuing the staff,” if staff quit right after the succession, the substance of the acquired asset erodes.

As for the direction of growth, home-visit medical care is mentioned. “There’s still plenty of potential to grow sales even with the current single store, and I think it could grow even further if we can accommodate home medical care”. A read that unit pricing can rise through reimbursement add-ons. It’s an initiative to raise unit price at the existing store using the existing patient base, meaning she’s tackling the lowest-investment-risk items first.

Kato also has ambitions to expand to two or three stores, but says this is difficult given her ideal of opening within the same station area while the current location is residential, and mentions a plan to use M&A again. She also adds the evaluation: “Batonz was very easy to search on, and features like the chat function were easy to use too.”

Satisfaction, not efficiency, is the choice

Kato’s management philosophy is described not as pursuing efficiency to handle more volume but rather as pursuing “even better service for customers” and “valuing each individual customer’s satisfaction.”

This doesn’t conflict with digitizing operations, if anything, it’s consistent. This is because it’s a matter of allocation: automating the areas that don’t touch patients (attendance, inventory, payroll) to give back time to the areas that do. If you don’t misjudge what to automate, service density and workload can coexist even with a small staff running the store.

What’s replicable, what’s not

Two things are replicable. One is the entry-point design of buying an existing business in an industry where you already have hands-on experience. Kato bought the continuation of the job she’d done for 15 years, not an unfamiliar industry. This is likely the type of small-scale M&A least prone to trouble. The other is the stance of directly answering the seller’s non-monetary conditions. The reason an individual beat a multi-store company wasn’t price.

What’s not replicable is the capital condition of being able to borrow acquisition funds from a physician father, and the rarity of the property itself, founded in 1975, run by a married couple. Pharmacies without successors are on the rise, but listings that come to market in a state where staff can be inherited wholesale aren’t always available. Kato’s side, too, must have needed both time to wait and an eye for opportunity, a part that doesn’t appear in the article as a number.

Related reading

• A food truck launched in four months — for comparing initial costs and startup path on the “opening from zero” side, rather than “buying”
• A rental space business grown to 7.5 million yen in monthly sales — a case with a similar idea of taking over existing assets and growing them through operations