Integroup Inc.

Business Details

INTEGROUP is a specialized M&A intermediary company that solves the successor shortage and business succession problems of small and medium-sized enterprises. It adopts a complete success fee system that does not charge retainer fees or interim fees to either the seller or the buyer, and has a fee structure with a minimum success fee of ¥15 million, one of the lowest in the industry, giving it strength in the small-scale deal segment. The company employs a system in which a single M&A consultant handles everything from initial consultation through closing on an end-to-end basis. In FY2026 (ending May 2026), revenue was ¥1,558 million, the number of completed deals was 49, and revenue per deal was ¥31,797 thousand.

Recent Overview

Revenue per deal plunged due to non-completion and prolonged deliberation periods for large deals, and operating profit fell 75.9% year on year

In FY2026 (ending May 2026), the number of completed deals increased to 49 (from 43 in the prior period), but the deliberation periods for several deals, including large ones, became prolonged and some fell through, causing revenue per deal to plunge to ¥31,797 thousand (from ¥44,004 thousand in the prior period). Revenue was ¥1,558 million (down 17.7% year on year) and operating profit was ¥119 million (down 75.9% year on year), representing a significant deterioration in performance. Selling, general and administrative expenses increased to ¥600 million (from ¥546 million in the prior period), and cost increases associated with the increase in consultants weighed on profit. In investing activities, ¥1,200 million was placed into time deposits, causing the balance of cash and cash equivalents at period end to decrease to ¥822 million (from ¥1,912 million in the prior period). For FY2027 (ending May 2027), the company forecasts revenue of ¥2,093 million and operating profit of ¥306 million, expecting revenue per deal of ¥33 million and completed deals per consultant of 1.2 (up 11.8% year on year). The plan for net increase in consultants has been curtailed from approximately 25% growth to approximately 10% growth (to 54 consultants) compared to the end of the prior period, with the company shifting its focus toward strengthening the training and management system for existing consultants.

Key Products

Growth Drivers

• There are approximately 260,000 small and medium-sized enterprise owners (aged 60 and above with undecided succession intentions) lacking successors, and the structural expansion of the SME M&A market continues
• Strengthening of government-led business succession and M&A support measures (such as study panels for reforming the SME M&A market)
• Price competitiveness in the small-scale deal segment through a fee structure featuring a complete success fee system and a minimum success fee of ¥15 million, one of the lowest in the industry
• Efforts to strengthen the collection of up-to-date buyer information through an increase in the buyer information research team, aimed at improving the deal completion rate
• Strengthening of guidance and sales support for consultants in each department through the introduction of a departmental system and departmental performance evaluation system
• Building a system to support consultants' sales activities through the establishment of a new inside sales department, leading to an increase in the acquisition of high-quality sale mandates
• Increasing the number of completed deals through strengthened collaboration (FA collaboration) with peer companies
• Diversifying deal sourcing routes through strengthened partnerships with financial institutions and others (network sourcing)

Risks

• A decline in the deal completion rate due to buyers strengthening deal screening and becoming more cautious (in FY2026 (ending May 2026), revenue per deal plunged 27.7% year on year to ¥31,797 thousand)
• Because of the complete success fee system, fluctuations in the number of completed deals and revenue per deal directly affect financial results, resulting in low earnings stability
• An increase in selling, general and administrative expenses associated with the increase in the number of consultants (¥600 million in FY2026 (ending May 2026), versus ¥546 million in the prior period)
• Intensifying competition in the M&A intermediary industry and a gap in brand recognition compared with major intermediary firms
• Deterioration in productivity due to a decline in the number of completed deals per consultant (in FY2026 (ending May 2026), the level was approximately 1.1 deals, calculated as 49 deals divided by an average of approximately 45.5 consultants)
• The risk that it will take a certain amount of time for the results of improvement measures (such as the departmental system and inside sales department) to become apparent
• The risk of revenue concentration on specific customers