Notice of Conclusion of Merger Agreement between Consolidated Subsidiaries

Transcription

1 For Immediate Release December 18, 2012 Company: FUJISOFT INCORPORATED Representative: Satoyasu Sakashita, President & Representative Director (Code: 9749, TSE First Section) Contact: Tatsuya Naito, Operating Officer and General Manager of Business Administration Department (Telephone: ) Notice of Conclusion of Merger Agreement between Consolidated Subsidiaries Tokyo, Japan December 18, 2012 FUJISOFT INCORPORATED ( the Company ) announces that Vinculum Japan Corporation (Osaka Securities Exchange JASDAQ: 3784; VINCULUM JAPAN ) and VIXUS INCORPORATED ( VIXUS ), both consolidated subsidiaries of the Company, have decided to merge, effective April 1, 2013, following meetings of the boards of directors of both companies held on December 18, In the merger, VINCULUM JAPAN will be the surviving company, and VIXUS will be dissolved. The business name of the surviving company will be VINX CORP. The two companies concluded a merger agreement on December 18, The change of the business name of the surviving company is conditional upon the approval of the merger and a related amendment to the articles of incorporation at an extraordinary shareholders meeting of VINCULUM JAPAN to be held on February 19, 2013, and on the merger agreement coming into force, which is planned on April 1, Details are as follows: 1. Purpose and outline of the merger Please refer to the attached document titled Notice of Conclusion of Merger Agreement Between VINCULUM JAPAN and VIXUS disclosed by VINCULUM JAPAN on December 18, Outlook The merger is between consolidated subsidiaries of the Company, and its effect on consolidated results from the fiscal year under review is minor. Attachment Document disclosed by VINCULUM JAPAN Notice of Conclusion of Merger Agreement Between VINCULUM JAPAN and VIXUS

2 For Immediate Release December 18, 2012 Company: Vinculum Japan Corporation Representative: Takashi Takizawa, President Chief Executive Officer (JASDAQ: 3784) Contact: Naoki Saijo, Operating Officer and Administration Dept (Telephone: ) Company: VIXUS INCORPORATED Representative: Minoru Yoshida, President & Representative Director Contact: Satoru Kimoto, Managing Director and Administration Division (Telephone: ) Notice of Conclusion of Merger Agreement Between VINCULUM JAPAN and VIXUS Vinculum Japan Corporation ( VINCULUM JAPAN ) and VIXUS INCORPORATED ( VIXUS ) announce that meetings of the respective boards of directors of the two companies held on December 18, 2012 resolved that the companies will merge with each other, effective April 1, VINCULUM JAPAN will be the surviving company, and VIXUS will be dissolved. The companies concluded a merger agreement on the same date. Details are as follows: 1. Purpose of the merger VINCULUM JAPAN provides high-quality, comprehensive IT services, including planning, development, operation, maintenance, and equipment sales, both in Japan and overseas, to a number of customers in the distribution and service industries, including major supermarkets and drugstores. VIXUS provides services, especially system solutions and outsourcing, primarily to customers in the distribution and logistics industries and for credit cards issued by distribution companies. Both companies are consolidated subsidiaries of FUJISOFT INCORPORATED ( FUJISOFT ). VINCULUM JAPAN and VIXUS are both information system companies primarily in the distribution and service industries. With the globalization of customer companies in the distribution and service industries, IT service providers are required to provide quicker responses and more stable IT infrastructure than ever before, along with services meeting Japanese standards to a greater degree. To respond to these requirements and to achieve stable and sustainable growth, the two companies need to enhance their operational efficiency and operational system by combining their management resources. Both companies believe that they will be able to provide higher value-added, comprehensive IT services and expand their business using their customer base, technologies, and expertise more effectively and efficiently. Based on their belief, they decided to proceed with the merger. -1-

3 2. Outline of the merger (1) Schedule of the merger Board of directors meetings adopting Tuesday, December 18, 2012 resolutions for the merger Conclusion of the merger agreement Tuesday, December 18, 2012 Notice of record date for shareholders Wednesday, December 19, 2012 (plan) meeting Record date for shareholders meeting Monday, January 7, 2013 (plan) Shareholders meeting to approve the Tuesday, February 19, 2013 (plan) merger Date of merger (effective date) Monday, April 1, 2013 (plan) (2) Method of the merger The merger is an absorption-type merger. VINCULUM JAPAN will be the surviving company. VIXUS is planned to be dissolved on the effective date of the merger. (3) Allotment of shares upon the merger Company VINCULUM JAPAN (Surviving company) VIXUS (To be resolved) Allotment upon the merger New shares to be issued upon the merger 11,350 common shares (Note) For each share of VIXUS, 0.52 share of VINCULM JAPAN will be delivered. (4) Subscription rights to shares and bonds with subscription rights to shares associated with the merger Not applicable 3. Basis for the calculation of the allotment upon the merger (1) Basis for the calculation To calculate the merger ratio fairly, each company requested a third party to calculate the merger ratio separately. VINCULUM JAPAN chose Deloitte Touche Tohmatsu LLC ( Deloitte Touche Tohmatsu ) as an independent calculation agent, and VIXUS chose Nomura Securities Co., Ltd. ( Nomura Securities ). Since VINCULUM JAPAN has a market share price, Deloitte Touche Tohmatsu used the average market share price method, and the discounted cash flow ( DCF ) method, to calculate the value of VINCULUM JAPAN shares. Since VIXUS does not have a market share price, Deloitte Touche Tohmatsu used the comparable company method and DCF method to calculate the value of VIXUS shares. The calculations of Deloitte Touche Tohmatsu are shown below. The merger ratio is the number of common shares in VINCULUM JAPAN to be allocated for each common share of VIXUS. The average market share price is calculated based on the closing price on December 14, 2012, the average closing price for the one month from November 15 to December 14, 2012, the average closing -2-

4 price for the three months from September 18 to December 14, 2012, and the average closing price for the six months from June 15 to December 14, Calculation method VINCULUM JAPAN VIXUS Range of merger ratios 1 Average market share price Comparable company 0.39 to DCF DCF 0.50 to 1.21 To calculate the merger ratios, Deloitte Touche Tohmatsu used information and materials provided by VINCULUM JAPAN and VIXUS and information and materials available to the public. Deloitte Touche Tohmatsu calculated the merger ratios on the assumption that the information and materials were accurate and complete and did not verify their accuracy and completeness on its own. Deloitte Touche Tomatsu did not assess, appraise, or analyze, or ask any third parties to assess or appraise, any individual assets or liabilities (including contingent liabilities) of VINCULUM JAPAN, VIXUS, or their affiliates. The calculations of the merger ratios of Deloitte Touche Tomatsu reflect information and economic conditions up to December 14, The financial forecasts for VINCULUM JAPAN and VIXUS are assumed to have been considered and made reasonably based on the best forecasts and judgments that can be obtained from VINCULUM JAPAN and VIXUS at the time of the publication of this document. Nomura Securities used the average market share price method, since VINCULUM JAPAN has a market share price, as well as the comparable company method and DCF method to calculate the share value of VINCULUM JAPAN. Since VIXUS does not have a market share price, Nomura Securities used the comparable company method and DCF method to calculate the value of VIXUS shares. The calculations of Nomura Securities are shown below. The merger ratio is the number of common shares in VINCULUM JAPAN to be allocated for each common share of VIXUS. The average market share price is calculated based on the closing price on December 14, 2012, the average closing price for the five days from December 10 to December 14, 2012, the average closing price for the one month from November 15 to December 14, 2012, the average closing price for the three months from September 18 to December 14, 2012, and the average closing price for the six months from June 15 to December 14, Calculation method VINCULUM JAPAN VIXUS Range of merger ratios 1 Average market share price Comparable company 0.46 to Comparable company Comparable company 0.50 to DCF DCF 0.48 to 1.15 To calculate the merger ratios, Nomura Securities used information and materials provided by VINCULUM JAPAN and VIXUS and information and materials available to the public. Nomura Securities calculated the merger ratios on the assumption that the information and materials were accurate and complete and did not verify their accuracy and completeness on its own. Nomura Securities did not assess, appraise, or analyze, or ask any third parties to assess or appraise, any individual assets or -3-

5 liabilities (including contingent liabilities) of VINCULUM JAPAN, VIXUS, or their affiliates. The calculations of the merger ratios of Nomura Securities reflect information and economic conditions up to December 14, The financial forecasts for VINCULUM JAPAN and VIXUS are assumed to have been considered and made reasonably based on the best forecasts and judgments that can be obtained from VINCULUM JAPAN and VIXUS at the time of the publication of this document. (2) Background to the calculation VINCULUM JAPAN and VIXUS considered the analyses and advice of the independent calculation agents they chose as experts and both companies financial situations, results, share prices, and dividends. Based on the consideration, the two companies consulted and negotiated with each other and have determined that the merger ratio described in 2. (3) is reasonable and in their interests. They determined the merger ratio at meetings of their boards of directors held on December 18, 2012 and concluded the merger agreement on the same day. If there is a significant change in the conditions for the calculation of the merger ratio, VINCULUM JAPAN and VIXUS may change the merger ratio through consultation. (3) Relations with calculation agents Neither of the independent calculation agents, Deloitte Touche Tomatsu and Nomura Scurrilities, is a related party of VINCULUM JAPAN or VIXUS and has any significant interest in the merger that should be described here. (4) Reason for possible delisting Under the delisting criteria of the Osaka Securities Exchange, JASDAQ (Standard Section), common stock of VINCULUM JAPAN may become an issue during the grace period for ceasing to be an effective surviving company due to the merger. If the stock is designated as an issue during the grace period for ceasing to be an effective surviving company due to the merger, VINCULUM JAPAN will make its best effort to continue to list the stock. (5) Steps taken to ensure fairness VIXUS is a wholly owned subsidiary of FUJISOFT, which is the parent company of VINCULUM JAPAN, and VINCULUM JAPAN asked Deloitte Touche Tomatsu, an independent calculation agent, to calculate the merger ratio to ensure the fairness of the merger ratio. VINCULUM JAPAN used the calculation as reference and consulted and negotiated with VIXUS. As a result, VINCULUM JAPAN determined the merger and the merger ratio described above at a meeting of its board of directors held on December 18, VIXUS asked Nomura Securities to calculate the merger ratio as an independent calculation agent to ensure the fairness of the merger ratio and consulted and negotiated with VINCULUM JAPAN, using the calculated merger ratio as a reference. At a meeting of its board of directors held on December 18, 2012, VIXUS determined the merger and the merger ratio described above. Neither VINCULUM JAPAN nor VIXUS received a fairness opinion from the independent calculation agent they chose. VINCULUM JAPAN and VIXUS received legal advice from their respective legal advisors, Oh-Ebashi LPC & Partners and Nishimura & Asahi LPC, about appropriate procedures for the merger. (6) Steps taken for avoiding conflicts of interest Of the directors of VINCULUM JAPAN, Mr. Satoshi Satou and Mr. Tomoya Kotani are also operating officers of FUJISOFT, the parent company of VIXUS. To avoid conflicts of interest, they did not participate in the discussion or resolution on the merger at any meeting of the board of directors of VINCULUM JAPAN or consultations and negotiations on the merger with VIXUS on the side of VINCULUM JAPAN. -4-

6 Of the auditors of VINCULUM JAPAN, Mr. Shigemi Ikushima is also an auditor of FUJISOFT, the parent company of VIXUS. To avoid conflicts of interest, he did not participate in the discussion on the merger at any meeting of the board of director of VINCULUM JAPAN. The proposal of the merger was approved unanimously by all five members excluding the abovementioned two directors of the board of directors of VINCULUM JAPAN. The two auditors excluding Mr. Ikushima also agreed with the merger. Of the directors of VIXUS, Mr. Minoru Yoshida is also a director of FUJISOFT, the parent company of VINCULUM JAPAN. To minimize conflicts of interest, he did not participate in the discussion and resolution on the merger at any meeting of the board of directors of VIXUS. The proposal of the merger was approved unanimously by all four members excluding Mr. Yoshida of the board of directors. The auditor also agreed with the merger. 4. Profile of the companies to be merged (as of September 30, 2012) (1) Name Vinculum Japan Corporation (Surviving company) VIXUS INCORPORATED (To be resolved) (2) Business Information-technology services Information-technology services (3) Established February 20, 1991 March 2, 1985 (4) Head office Dojimahama, Kita-ku, Osaka 2-7 Kandasudacho, Chiyoda-ku, Tokyo (5) Representative Takashi Takizawa, President Chief Executive Officer r (6) Capital 542 million 593 million (7) Number of shares issued Minoru Yoshida, President & Representative Director 31,500 shares 21,828 shares (8) Net assets 3,739 million (consolidated) 849 million (non-consolidated) (9) Total assets 5,696 million (consolidated) 11,282 million (non-consolidated) (10) Fiscal year end March 31 March 31 (11) Number of employees (12) Major customers (13) (14) (15) Major shareholders and their holding Main financing banks Relationships between the companies 622 (consolidated) 534 (non-consolidated) AEON IBIS CO.,LTD. Matsumotokiyoshi Holdings Co., Ltd. TOSHIBA TEC CORPORATION FUJISOFT INCORPORATED 60.39% VINCULUM JAPAN Employee Stock Ownership Association 6.91% Kunihiko Urabe 2.23% Katsuji Aikawa 2.01% Masaaki Shirota 1.51% Sumitomo Mitsui Banking Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd. Capital relationship Personnel relationship Business relationship The Daiei, Inc. Cedyna Financial Corporation The Maruetsu, Inc. FUJISOFT INCORPORATED % Sumitomo Mitsui Banking Corporation Mizuho Bank, Ltd. There is no capital relationship to be stated here between VINCULUM JAPAN and VIXUS. There is no personnel relationship to be stated here between VINCULUM JAPAN and VIXUS. VINCULUM JAPAN sells products to VIXUS. -5-

7 Related party or not VIXUS is a wholly owned subsidiary of FUJISOFT, the parent company of VINCULUM JAPAN, and a related party of VINCULUM JAPAN. (16) Results in the past three years (Million yen) Year ended Mar VINCULUM JAPAN (Consolidated) Year ended Mar Year ended Mar Year ended Mar VIXUS (Non-consolidated) Year ended Mar Year ended Mar Net assets 3,547 3,640 3,553-2, Total assets 5,690 5,635 5,406 10,965 11,627 10,584 Net assets per share (yen) 111, , , ,262, , , Net sales 9,386 9,273 9,156 25,126 20,025 17,851 Operating income ,170 1,478 1,103 Ordinary income ,079 1,419 1,047 Net income ,092 1, Net income per share (yen) -11, , , ,144, , , Dividend per share (yen) 2,700 2,000 1, Surviving company after the merger (1) Business name VINX CORP. (2) Business Information-technology services (3) Head office Dojimahama, Kita-ku, Osaka (4) Representative (5) Capital 542 million yen (6) Total assets To be determined (7) Net assets To be determined (8) Fiscal year end March 31 Minoru Yoshida, President & Representative Director Takashi Takizawa, Vice President & Representative Director 6. Overview of accounting Under the accounting standard for business combinations, the merger is a transaction under common control, and the accounting will be under Paragraph 247 of the Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures. There will therefore be no goodwill. 7. Outlook VINCULUM JAPAN is examining the effect of the merger on its consolidated results. If VINCULUM JAPAN needs to revise its results forecasts, or if it has matters to announce, it will announce the revision or matters promptly. 8. Transactions with the controlling shareholder -6-

8 VIXUS is a wholly owned subsidiary of FUJISOFT, the parent company of VINCULUM JAPAN, and the merger is a transaction between VINCULUM JAPAN and its controlling shareholder. VINCULUM JAPAN disclosed a corporate governance report on November 7, 2012, and the report includes its policy on the protection of minority shareholders in transactions with its controlling shareholder. The policy is as follows: Having developed through mergers and acquisitions, the group of FUJISOFT, the parent company of VINCULUM JAPAN, has established its group charter, which says that the group respects the dignity, autonomy, and independence of each group company as an independent entity. The strategy of the FUJISOFT Group is that the entire Group grows as Group companies develop their operations under their own policies and promote alliances among themselves to take advantage of their features. Under this strategy, the business domains of Group companies overlap, but the Group does not impose any constraints on or make any adjustments in the business development of each Group company. The Company therefore considers that its independence is secured to a certain degree but that its relationship with FUJISOFT is important. When the Company conducts transactions with FUJISOFT, the parent company, the Company determines terms and conditions reasonably through mutual consultation in accordance with general terms and conditions in business transactions and terms and conditions with comparable companies. The Company applies the same criteria to any transfers of important assets, significant borrowings, and other matters to be resolved at Board of Directors meetings between the Company and FUJISOFT as the criteria for transactions with other third parties, and those transactions with FUJISOFT need to be resolved at Board of Directors meetings. When determining the merger, VINCULUM JAPAN secured its independence, ensured fairness through the steps described in 3. (5), and avoided conflicts of interest through the steps described in 3. (6). We believe that these steps comply with the policy described above. In addition to that, Outside Auditors Tomoyuki Murata and Yoshihiro Sato, who are independent officers having no interest in the controlling shareholder, represented VINCULUM JAPAN and consulted and negotiated with VIXUS on the merger ratio, using the calculations of an independent calculation agent and the advice of a legal advisor as reference, on December 18, Only directors who do not have any interests in FUJISOFT, the controlling shareholder, discussed the merger and made the resolution, considering the calculations and advice. For these reasons, VINCULUM JAPAN has obtained opinions to the effect that its minority shareholders will not suffer any disadvantage stemming from the merger. (Reference) VINCULUM JAPAN s consolidated results forecasts for the fiscal year ending March 31, 2013 (announced on November 2, 2012) and consolidated results for the previous fiscal year Results forecasts (Year ending March 2013) Results (Year ended March 2012) Net sales Operating income Ordinary income Net income 10,300 million 263 million 253 million 165 million 9,156 million - 89 million - 40 million - 36 million -7-