Announcement of Acquisition of VISH Inc.
Announcement of Acquisition of VISH Inc.
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 VISH Inc. (“VISH,” headquartered in Nagoya-shi, Aichi, Japan; Nobuo Ota, CEO and 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.
In order to achieve this transformation, since FY2020, SHIFT has been developing unique services called “DAAE,” which abbreviates Design, Agility, Assembly, and Economic Quality. In future Japan’s technology industry, we expect that engineers face more challenging and sophisticated demands from users, more competitive market environments and more requirements to shorten development cycle time. Under these circumstances, , it will be crucial to develop services centered on DAAE, replacing the concept of “QCD(*1),” which is widely insisted to be essential in Japan’s conventional manufacturing industry. Since its launch in September 2019, SHIFT has delivered the services centered on “DAAE,” booking approximately ¥400 million sales, and SHIFT and its group companies, as a group, have been steadily expanding the services.
In order to further expand the DAAE services, SHIFT recognizes the need to raise awareness in public as well as that in the Japanese technology industry, and to continuously build a track record of these services.
VISH provides IT services to such industries as kindergartens, nursery schools, and swimming schools, which have been relatively slow to adopt IT. Since these sectors are expected to continuously adopt various types of IT products and services, SHIFT considers that there is a significant opportunity for VISH to grow.
VISH, moreover, delivers one-stop services from planning, development to operation and has their strength in web designing as well. Therefore, SHIFT concluded VISH would be compatible with DAAE services, aiming at “supporting to produce sellable products and services,” and promote its growth through cooperation within SHIFT Group.
In addition, by having VISH on board, of which is headquartered in Nagoya, Aichi, SHIFT Group will be able to further strengthen its sales activities in rural areas and acquire cloud service functions that SHIFT has not previously held. With those benefits, SHIFT will be able to further improve the value of its services, and VISH will be able to further enhance and grow its service value and its business by joining SHIFT Group, which has various IT service functions and customers in diverse industries.
With the addition of VISH, SHIFT Group will commit even more to addressing its customers’ needs through the provision of integrated services as One-SHIFT.
*1 QCD is a term that consists of three concepts: Quality, Cost, and Delivery. It has been widely advocated to be crucial for “ever-improving manufacturing” in Japan whose manufacturing industry has been globally competitive.
２．Overview of VISH
| (1) Name | VISH Inc. | |||
| (2) Address | SC Nishiki ANNEX Building 5F, 2-10-13 Nishiki, Naka-ku, Nagoya-shi, Aichi | |||
| (3) Name and title of representative | Nobuo Ota, Representative Director | |||
| (4) Business | ・Providing cloud services ・Sysetem development and technical support services |
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| (5) Capital stock | ¥11,500 thousand | |||
| (6) Founded | December 6th, 2004 | |||
| (7) Major shareholders and their shareholding ratio(s) | Val Laboratory Corporation | |||
| (8) Relationship between SHIFT and VISH | Capital relationship | No material capital relationship between SHIFT and VISH, neither between related party and related company and VISH related party and related company. | ||
| Personnel relationship | No material personnel relationship between SHIFT and VISH, neither between related party and related company and VISH related party and related company. | |||
| Business relationship | No material business relationship between SHIFT and VISH, neither between related party and related company and VISH related party and related company. | |||
| (9) Operating results and financial position of VISH over the past three years (¥ in 000s) | ||||
| Fiscal year end | March 31st, 2018 | March 31st, 2019 | March 31st, 2020 | |
| Net assets | 155,007 | 216,991 | 330,147 | |
| Total assets | 246,045 | 364,706 | 471,118 | |
| Net assets per share (yen) | 139,646 | 195,487 | 297,430 | |
| Revenues | 442,596 | 541,656 | 624,569 | |
| Operating income | 55,795 | 114,545 | 169,973 | |
| Ordinary income | 55,929 | 114,447 | 169,593 | |
| Net income | 27,611 | 61,983 | 113,156 | |
| Net income per share (yen) | 24,875 | 55,841 | 101,942 | |
| Dividend per share (yen) | 0 | 0 | 0 | |
３．Overview of Seller(s)
| (1) Name | Val Laboratory Corporation (“Val Laboratory”) | |
| (2) Address | 2-3-17 Koenji-kita, Suginami-ku, Tokyo, | |
| (3) Name and title of representative | Soshi Kikuchi, Representative Director | |
| (4) Business | – Development, sales and management of computer software – Outsourcing of computer processing by computers and guidance on computers – Internet-based information services and mail-order sales – Internet-based advertising, sales of medical devices, and publishing |
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| (5) Capital stock | ¥41 million | |
| (6) Founded | July 26, 1976 | |
| (7) Net assets | Undisclosed to respect their rights | |
| (8) Total Assets | Undisclosed to respect their rights | |
| (9) Major shareholders and their shareholding ratio(s) | Undisclosed to respect their rights | |
| (10) Relationship between SHIFT and Val Laboratory | Capital relationship | No material capital relationship between SHIFT and Val Laboratory, neither between related party and related company and Val Laboratory related party and related company. |
| Personnel relationship | No material personnel relationship between SHIFT and Val Laboratory, neither between related party and related company and Val Laboratory related party and related company. | |
| Business relationship | No material business relationship between SHIFT and Val Laboratory, neither between related party and related company and Val Laboratory related party and related company. | |
| Related party | Val Laboratory is not a related party of SHIFT. | |
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: 0.0%) |
| (2) Number of shares to be acquired by SHIFT | 1,110 shares (Number of voting rights: 1,110) |
| (3) Acquisition price | Undisclosed to respect their rights |
| (4) Number of shares to be held by SHIFT after the transfer | 1,110 shares (Number of voting rights: 1,110) (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 | December 22nd, 2020 |
| (2) The execution date of the share purchase agreement | January 7th, 2021 |
| (3) Closing date | January 7th, 2021 |
Note: On December 22nd, 2020, the Board of Directors made a resolution to authorize its CEO/Representative Director to decide whether to make the aforementioned acquisition assuming that major terms and conditions are within the range of those authorized by the Board of Directors.
６．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
ir_info@SHIFTinc.jp