Announcement of Acquisition of Kronos Co., Ltd by SHIFT’s Subsidiary

SHIFT Inc. (“SHIFT,” headquartered in Minato-ku, Tokyo, Japan; Masaru Tange, CEO and Representative Director) announced today that its wholly-owned subsidiary, Baristride Group Inc. (“Baristride Group,” headquartered in Meguro-ku, Tokyo, Japan; Shoji Hatakeyama, Representative Director) decided to acquire a 100% equity interest in Kronos Co., Ltd (“Kronos,” headquartered in Shinagawa-ku, Tokyo, Japan; Toshiyuki Tsukimura, Representative Director and President), a provider of web system and app development, DX (digital transformation) solutions, training for IT engineers.
Note: Baristride Group is a wholly-owned subsidiary of SHIFT.
Note: Baristride Group owns a 100% equity of ALH Inc. (“ALH,” headquartered in Meguro-ku, Tokyo, Japan; Shoji Hatakeyama, Representative Director,) which provides IT solutions through its subsidiaries including ALH and plans to facilitate collaboration between ALH and Kronos.

1. Reason for the acquisition
ALH is a group company of SHIFT and develops software development businesses. ALH has been working to grow thoroughly by increasing the number of engineers through aggressive recruitment activities, raising the unit price of engineer, and improving employee satisfaction through the development of various human resources measures. As a result, the cumulative sales for Q3 of FY08/22 increased 33% YonY basis and achieved high growth.

SHIFT believes that by welcoming Kronos and engaging in collaboration with ALH, they will enter into new areas and develop sales in new regions. Kronos’s AI (Artificial Intelligence) solution business is an area that can be expected to grow significantly in the future. According to a survey by IDC Japan, the domestic AI system market achieved growth by 26.3% in 2021 YonY basis, and the CAGR (Compound Annual Growth Rate) from 2021 to 2026 is also expected to be around 24.0% (*1). By entering markets that are expected to grow significantly in the future, ALH will work to achieve further growth. Also, ALH has received requests on IT training business recently. In collaboration with Kronos, ALH will not only strengthen and expand its IT training business for B2B, but also develop it for B2C for further growth.

ALH will also work to expand its Osaka base opened in March 2020 by collaborating Kronos’ Osaka base. Expanding its customer base in the Osaka region is one of ALH’s priority areas. By coordinating sales activities each other, ALH and Kronos will work to expand their customer bases and increase unit prices by promoting cross-selling.

Kronos is also able to expand its customer base and increase added value by collaborating with ALH, which has an extensive track record in software development and has many engineers, as well as group companies of SHIFT, which offer numerous services.

Kronos and ALH will work together to accelerate their growth. As a group, they will continue to work diligently to enhance the value of their service offerings and to support “customers’ software services and products that sell”

*1 IDC Japan “Announcement of Domestic AI Market Forecast”
https://www.idc.com/getdoc.jsp?containerId=prJPJ49145122

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