Announcement of Acquisition of Survage System Inc.
Announcement of Acquisition of Survage System Inc.
SHIFT Inc. (“SHIFT,” headquartered in Minato-ku, Tokyo, Japan; Masaru Tange, CEO and Representative Director) announced today that ALH Inc., a wholly-owned subsidiary of SHIFT, (“ALH,” headquartered in Meguro-ku, Tokyo, Japan; Shoji Hatakeyama, Representative Director) has entered into a definitive agreement to acquire a 100% equity interest in Survage System Inc. (“Survage,” headquartered in Chiyoda-ku, Tokyo, Japan; Toshinori Takeda, Representative Director).
１．Reason for the acquisition
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 achieving 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. SHIFT has also shifted its corporate branding from “SHIFT as a software testing company” to “SHIFT as a sellable services producer,” to realize ¥100 billion of net sales. As this new catchphrase indicates, SHIFT will commit to bringing success to the businesses of its customers.
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. Moreover, SHIFT seeks to provide broader value adds, including support services to shorten the lead time for software development and to improve the end-user usability of products/services, not to mention minimizing the number of defects in software.
SHIFT recognizes that it is imperative to strengthen its presence in the area of network integration to assist clients in enhancing their system performance and usability as a “sellable services producer.” Therefore, SHIFT now partners with Survage to expand its expertise and client base in this area to address increasing demand. Having Survage on board, SHIFT continues to expand its one-stop shop, “One SHIFT,” and address clients’ growing and diversifying needs. ALH, after Survage joins, will be able to enhance knowledge in network integration and expand its client base.
By joining SHIFT Group, which allows Survage to strengthen its brand and access SHIFT’s client base, Survage will boost its growth potential. In addition, Survage will aim to accelerate its growth by reinforcing its governance system as a member of SHIFT Group.
２．Overview of ALH
| (1) Name | ALH Inc. |
| (2) Address | Orix Meguro Building, 1-24-12 Meguro, Meguro-ku, Tokyo |
| (3) Name and title of representative | Shoji Hatakeyama, Representative Director |
| (4) Business | ⁃ Develop Web applications ⁃ Build out network infrastructure ⁃ Provide software security vulnerability testing services |
| (5) Capital stock | ¥9 million |
| (6) Founded | January 2014 |
| (7) Major shareholders and their shareholding ratio(s) | Baristride Group Inc 100% (Baristride Group Inc. is a wholly-owned subsidiary of SHIFT) |
３．Overview of Survage
| (1) Name | Survage System Inc. | |||
| (2) Address | Shibata Building, 78-3 Kanda-Sakumagashi, Chiyoda-ku, Tokyo | |||
| (3) Name and title of representative | Toshinori Takeda, Representative Director | |||
| (4) Business | ⁃ Design, build, operate and maintain information technology infrastructure ⁃ Sell and maintain PCs, servers and network devices and equipment ⁃ Support and deploy system engineers |
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| (5) Capital stock | ¥10 million | |||
| (6) Founded | January 2008 | |||
| (7) Major shareholders and their shareholding ratio(s) | Individual investor(s) 100% | |||
| (8) Relationship between SHIFT and Survage | Capital relationship | No material capital relationship between SHIFT and Survage, neither between SHIFT related party/company and Survage related party/company. | ||
| Personnel relationship | No material personnel relationship between SHIFT and Survage, neither between SHIFT related party/company and Survage related party/company. | |||
| Business relationship | No material business relationship between SHIFT and Survage, neither between related SHIFT party/company and Survage related party/company. | |||
| (9) Operating results and consolidated financial position of Survage over the past 3 years (¥ in 000s) | ||||
| Fiscal Year End | September 30, 2018 | September 30, 2019 | September 30, 2020 | |
| Net assets | 22,639 | 29,668 | 28,399 | |
| Total assets | 80,752 | 81,681 | 120,513 | |
| Net assets per share (¥) | 22,639 | 29,668 | 28,399 | |
| Revenues | 67,806 | 133,464 | 192,396 | |
| Operating income | (7,114) | 5,465 | (3,802) | |
| Ordinary income | (7,442) | 7,028 | (3,137) | |
| Net income | (7,442) | 7,028 | (3,487) | |
| Net income per share (¥) | (7,442) | 7,028 | (3,487) | |
| Dividend per share (¥) | 0 | 0 | 0 | |
４．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.
５．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: 0.0%) |
| (2) Number of shares to be acquired by SHIFT | 1,000 shares (Number of voting rights: 1,000) |
| (3) Acquisition price*1 | Not disclosed due to a seller request |
| (4) Number of shares to be held by SHIFT after the transfer | 1,000 shares (Number of voting rights: 1,000) (Percentage of voting rights: 100%) |
Note *1: SHIFT has negotiated the aforementioned acquisition price based on a third party appraisal.
６．Schedule
| (1) ALH Board resolution date | November 27, 2020 |
| (2) Execution date of share purchase agreement | November 30, 2020 |
| (3) Closing date | November 30, 2020 |
Note: As this acquisition was made by ALH, SHIFT’s Board of Directors made no resolution regarding this transaction. On November 27, 2020, ALH’s Board of Directors made a resolution to authorize its Representative Director to determine whether to make this acquisition assuming that major terms and conditions on the acquisition are within the range of those authorized by ALH’s Board of Directors.
７．Future outlook
SHIFT expects that this acquisition would have no material impact on its financial results and financial condition.
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Contact
Tomohiro Oka
Section Manager, Management Administration Division
Email: ir_info@shiftinc.jp