SHIFT M&A Case Studies
SHIFT seeks out partners that aim for ambitious goals. By forming business and capital alliances, SHIFT has resolved challenging issues such as “low pricing and low profitability due to being a subcontractor,” “not being able to recruit people,” and “not being unable to scale despite technological advantages.”
Here are some of SHIFT’s group companies that have joined the SHIFT Group by way of M&A and made significant business developments that are mutually beneficial.
System I Co., Ltd.
System I was not able to ask its clients (top tier system integrators) for high prices as it was a subcontractor. By contrast, SHIFT has clients in a wide range of industries from enterprise to entertainment. In addition, as a prime vendor, SHIFT directly works with end users owing to its strong customer base, which provides upsell opportunities to group companies like System I.
Leveraging SHIFT’s customer base and sales capabilities have allowed System I to increase end user clients and raise the price per engineer in a short period of time.
Keisuke Kuzukawa, President and Representative Director
When I met SHIFT’s senior management team, I felt SHIFT was the best partner for System I.
When I succeeded as President, Masatomo Sano, then-President and current Chairman of System I, he introduced me to SHIFT as a capital and business alliance partner. I would assume that Mr. Sano took the time to deliberately consider what was best for System I and who would be the best alliance partner, and in the end, Mr. Sano chose to partner with SHIFT, hoping that SHIFT would assist System I in stabilizing its business base and growing faster
When I first heard about the partnership talks, of course, I had high expectations, but at the same time, I had concerns, such as how my employees would be treated and how our corporate culture would change.
However, when I met Masaru Tange, SHIFT CEO, and his executive team, and they communicated their vision to me enthusiastically, I felt that if these people became my partners, they would be highly reliable. Furthermore, I still clearly remember that right after the meeting, I agreed with Mr. Sano that SHIFT would be the best alliance partner for System I.
Leveraging SHIFT’s track record of successful capital and business alliances, we hope to create new opportunities.
Although it has not been long since we joined the SHIFT Group, we are already benefiting from the partnership. For example, we increased the number of end user clients and the price per engineer.
SHIFT has an overwhelming number of clients in a wide variety of industries. Before joining the SHIFT Group, we had worked with a few customers, but now by leveraging SHIFT’s customer base and sales capabilities, we work with end user clients who had not done business with before the partnership.
In fact, this partnership gives us better financial results. Moreover, we enjoy working on exciting projects involving industries that we have not done business with before.
Needless to say, our existing clients are important, but we hope to grow on new opportunities by working with new people.
Working on projects with end user clients increased opportunities for employees to improve their careers.
Another benefit from this partnership is that my employees now have several ways to advance their careers. They work on projects with end user clients in various industries. In addition to financial results such as revenues, we are now able to offer a variety of projects to our engineers, and they can pick ones they would be interested in.
Moreover, we can participate in seminars by Hinshitsu University (SHIFT’s training/learning services) and study sessions run by other SHIFT Group companies. This has enabled us to enhance our training and career development efforts. Seeing the employees taking the seminars and coming back with a positive attitude gives me more confidence in them.
Make the software engineering skills of your engineers globally competitive. This can be achieved if you team up with SHIFT.
SHIFT has a solid track record of setting aggressive revenue targets and achieving them like a magic. You will gain a lot as a manager if you work with SHIFT and see them setting ambitious targets and pushing forward toward achieving them.
While I am President of System I, I am also an engineer. My dream is to make world-class the level of software development skills of my company’s engineers and eventually of Japan’s. Since SHIFT’s sales are amazing, all we need to do is improve our technical skills. By continuing to work on a wide variety of projects for SHIFT customers and pursuing high technological capabilities, I am confident that their skills will be much better, and their skills will be globally competitive in a not-so-distant future.
Before joining the SHIFT Group, Airitech Inc. struggled to hire engineers, whereas SHIFT annually recruited about 1,000 engineers and other employees back then. By implementing a variety of measures in the area of HR, from recruiting methods to the establishment of a HR system, not only does SHIFT help Airitech with recruiting, but also create a work environment in which the employees feel their work is worthwhile.
Airitech successfully recruited capable engineers by leveraging SHIFT’s know-how of recruiting 1,000 people annually.
Mr. Masanori Yamasaki, Representative Director
The capital and business alliance deal was done in about one month. From this speed, I felt there was chemistry between SHIFT and Airitech.
When trying to accelerate the expansion of our business, we wanted to concentrate on improving our services. Nonetheless, we had to do other things from sales and marketing to HR. Thus, to solve this issue, we decided to form the capital and business partnership with SHIFT. As I personally knew Mr. Koji Yamagishi, Founder, then-President and then-CEO of MethodoLogic at that time, who had already joined the SHIFT Group, SHIFT was one of our candidates to form a partnership with.
I always try not to waste time even when making important decisions. Therefore, I would have refused the deal if SHIFT had taken more than three months to sign the deal. Nevertheless, I found that my way of thinking and even my age were close to those of Mr. Tange, CEO of SHIFT, and the deal was executed in about a month. I believe that there is great chemistry between us in terms of speed and corporate culture.
By accelerating recruiting, the number of employees has increased several times after the deal.
We are aiming to hire even more employees. One of the benefits from this deal is hiring. Before joining the SHIFT Group, we created ourselves Webpages to hire engineers. Yet, we only had one application per few months if lucky. I couldn’t say it was going well.
After the deal, however, SHIFT shared with us the know-how to recruit 1,000 people annually, and moreover, on our behalf, they undertook time-consuming tasks such as creating Webages to hire and sending scout emails. This allowed us to focus on selecting candidates as to what type of personnel we should hire. In part because of the creditworthiness of the SHIFT Group, we have been able to accelerate hiring, and the number of employees has risen many times greater than before.
I care about my employees. This value has been shared with SHIFT.
SHIFT is a company that values its employees by raising their annual salaries by 10%, holding company events, and enhancing employee benefits. Since I also had this value and wanted to care about my employees, we have rebuilt our HR system in collaboration with SHIFT. If I had tried to rebuilt it without their help, I doubt I would have successfully done it.
In addition to the HR system, SHIFT assisted us in establishing other administrative systems. This allowed us to focus on refining our services. For this reason, we now have grown to the extent to have a subsidiary. Being in the SHIFT Group makes me feel confident and comfortable aggressively hiring and accelerating growth.
SHIFT will realize the big goal: global expansion.
I have been doing business with a variety of companies, but I believe that SHIFT is such a rare company to have a sense of unity. Furthermore, they are so enthusiastic about what they do. The combination of SHIFT’s culture and having more employees has fueled enthusiasm within Airitech as well.
Now I am pursuing my dream because Airitech joined the SHIFT Group. Going forward, I will ask SHIFT for less help and make greater contributions to accelerate the SHIFT Group’s growth. My goal as a member of the SHIFT Group is to expand this franchise globally. To this end, we will need to further solidify the foundation of Airitech and the SHIFT Group. Airitech will make significant contributions to the advancement of our cutting-edge technologies. We are committed to achieving this goal.
SHIFT SECURITY Inc.
“We did not scale as fast as we wanted despite our technological advantages.” SHIFT SECURITY struggled to standardize its technologies and service delivery process. SHIFT has successfully standardized a variety of service delivery processes, including software testing and vulnerability testing techniques that are in the brains of highly skilled white hackers. SHIFT provides SHIFT SECURITY with expertise in standardization, which enables SHIFT SECURITY to maximize the output of highly technical, value-added security services by eliminating excessive reliance on a few highly skilled specialists and transferring the technical skills to those who aspire to be first-rate security engineers.
When seeking out an alliance partner, I could only think of SHIFT that is good at standardizing processes.
Mr. Shinichi Matsuno, Representative Director
In partnership with SHIFT, you can scale your business in the shortest period of time. That is why I decided to join the SHIFT Group.
When founding a security services start-up, I had a variety of options, including raising funds from venture capital firms and launching a new business division at a company. Although many companies I talked to expressed interest in working with me, I chose to establish a joint venture with SHIFT because SHIFT was good at standardizing various business processes.
By combining my core technologies with SHIFT’s know-how, I was able to scale my business and boost its growth in the shortest time. I came up with this idea, intuitively, and in fact, my intuition turned out to be spot on.
By partnering with the SHIFT Group, it took only three years to complete things that would have taken five years otherwise.
With the launch of SHIFT SECURITY together with SHIFT, we have been able to rapidly standardize white hacker skills. In addition, as we no longer need to rely on specialists, even inexperienced individuals can now work as security engineers. Furthermore, without lowering quality, we can mass-produce and deliver vulnerability testing services, and three years after SHIFT SECURITY was established, we have more than 100 engineers on board and almost achieved ¥1 billion of net revenues.
One of major factors behind our growth was that SHIFT’s sales team understood our strengths and introduced our services to their customers passionately.
I wanted to make a big impact on society in a short period of time – I had this desire even before the establishment of SHIFT SECURITY. I am convinced that had I not joined the SHIFT Group, it could have taken more than five years to accomplish this goal, and in fact, we made it in three years owing to the partnership with SHIFT.