IBJ, Inc. (A): Seeking Matrimony in Japan

In March 2020, Shigeru Ishizaka, founder and CEO of IBJ, Inc., Japan's largest marriage matching service provider, faced a critical decision regarding the company’s planned ¥3.5 billion (US$32.8 million) acquisition of competitor ZWEI Co., Ltd. IBJ, founded in 2006, had seen steady growth, achieving ¥15 billion (US$137 million) in net sales and matching 8,300 couples in 2019 alone. Ishizaka was initially confident in the decision to acquire ZWEI, given that IBJ had successfully acquired and turned around another competitor it acquired in 2019, transforming it from a loss-making company into a profitable business within roughly a year. However, ZWEI’s 2019 operating loss of ¥333.6 million (US$3.1 million) raised concerns. The stock market reacted negatively to the acquisition, and IBJ’s share price dropped to a record low. Compounding Ishizaka’s concerns was the rapid spread of COVID-19, which disrupted IBJ’s in-person matchmaking services. With ZWEI’s business model similarly reliant on in-person events, Ishizaka began to question whether the acquisition was the right move and how IBJ could generate value from it amid the uncertainty of the pandemic.