その常識、変えてみせる。 SHIFT

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Announcement of Acquisition of SNC Co., Ltd.

April 9, 2020
To Our Valued Stakeholders,

Announcement of Acquisition of SNC Co., Ltd.

SHIFT Inc. (“SHIFT,” headquartered in Minato-ku, Tokyo, Japan; Masaru Tange, CEO and Representative Director) announced today that it has entered into a definitive agreement to acquire a 100% equity interest in SNC Co., Ltd. (“SNC,” headquartered in Osaka-shi, Osaka, Japan; Hirofumi Nakayama, Representative Director).

1. Reason for the acquisitions
As SHIFT has been expanding its software quality assurance business since 2009, it has served clients in a wide variety of industries, such as financial, retail, logistics and entertainment. Moreover, toward the achievement of its growth strategy “SHIFT 1000,” which aims at ¥100 billion of net sales, SHIFT has been strategically acquiring businesses to expand and enrich its service portfolio.

To realize “SHIFT 1000,” SHIFT is transforming itself into a more comprehensive service provider around software engineering and quality assurance including systemization planning, infrastructure design/build-out, application design/development and customer support. To be more comprehensive as a software quality assurance provider, SHIFT assists clients in enhancing the quality of not only their software products themselves but also their software development process from upstream to downstream. As part of this effort, SHIFT provides a variety of services including post-release help desk services to cope with the ever shortening release cycle of client software.

SHIFT sees increasing demand for procuring and kitting used personal computers, related devices and equipment with necessary specifications and software installed for corporate clients. As this process occurs after software testing, SHIFT will be able to provide more seamless services in this new partnership with SNC.

Furthermore, the acquisition of SNC allows SHIFT to strengthen its help desk business especially for large enterprise clients, although SHIFT PLUS Inc. (“SHIFT PLUS”), a SHIFT group company, already provides support services mainly to consumers.

By joining SHIFT Group, SNC will be able to enhance its brand image and enlarge its client base. Moreover, SNC will enrich its services and differentiate itself from its competitors in collaboration with SHIFT and SHIFT PLUS.

Having SNC on board, SHIFT Group will accelerate growth and continue to transform itself to be a more comprehensive quality assurance provider and address a wide array of client needs and wants.

2. Overview of SNC

(1)    Name SNC Co., Ltd.
(2)    Address Shoko Chukin Semba Building, 9F, 1-18-17, Minami-Semba, Chuo-ku, Osaka-shi, Osaka
(3)    Name and title of representative Hirofumi Nakayama, Representative Director
(4)    Business ⁃   Sell used personal computers
⁃   Web services
⁃   Information technology managed services
(5)    Capital stock 50 million yen
(6)    Founded July 1997
(7)    Major shareholders and their shareholding ratio(s) Individual investor(s) 100%
(8)    Relationship between SHIFT and SNC Capital relationship There is no material capital relationship between SHIFT related party/company and SNC related party/company.
Personnel relationship There is no material personnel relationship between SHIFT related party/company and SNC related party/company.
Business relationship There is no material business relationship between related SHIFT party/company and SNC related party/company.
Operating results and financial position of SNC over the past 3 years (thousands of yen)
Fiscal Year End June 30, 2017 June 30, 2018 June 30, 2019
Net assets 202,188 240,190 289,918
Total assets 363,292 403,531 450,836
Net assets per share
(thousands of yen)
1,010 1,201 1,449
Revenues 1,201,745 1,339,669 1,317,009
Operating income 48,194 50,600 69,082
Ordinary income 51,943 56,210 74,652
Net income 35,054 38,001 49,728
Net income per share
(thousands of yen)
175 190 248
Dividend per share
(thousands of yen)
0 0 0

3. Overview of Seller(s)
SHIFT does not disclose seller name(s) and address(es) to respect their rights. SHIFT has no material capital/ personnel relationship with the seller(s) before this acquisition.

4. Number of shares to be acquired, acquisition price, and shareholdings before and after transaction

(1)    Number of shares held by SHIFT before the transfer None

(Number of voting rights: 0)

(Percentage of voting rights held: 0%)

(2)    Number of shares to be acquired by SHIFT 200 shares

(Number of voting rights: 200)

(3)    Acquisition price*1 ¥908 million including due diligence fees, etc. (Estimated)
(4)    Number of shares to be held by SHIFT after the transfer 200 shares

(Number of voting rights: 200)

(Percentage of voting rights: 100%)

Note *1: SHIFT has negotiated the aforementioned acquisition price based on a third party appraisal.

5. Schedule

(1)    Board resolution date March 24, 2020
(2)    Execution date of share purchase agreement April 9, 2020
(3)    Closing date April 30, 2020 (Expected)

Note: On March 24, 2020, the Board of Directors made a resolution to authorize its CEO/Representative Director to decide whether to execute the acquisition assuming that major terms and conditions are within the range of those authorized by the Board of Directors.

6. Future outlook
SHIFT will disclose an impact on its future financial outlook regarding the aforementioned acquisitions as soon as possible.

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Contact
Tomohiro Oka
Section Manager, Management Administration Division
(TEL. +81-3-6809-1165)

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