Notice Regarding Conclusion of Share Purchase Agreement with Kyodo Printing Co., Ltd. for Transfer of Nissha’s Information and Communication Business (Tokyo Area)

September 4, 2018

Nissha Co., Ltd.

Nissha Co., Ltd. (hereinafter, “Nissha”), Nissha Printing Communications, Inc. (hereinafter, “Nissha Printing Communications”), Nissha’s subsidiary in charge of Information and Communication business, and Kyodo Printing Co., Ltd. (hereinafter, “Kyodo Printing”) concluded a share purchase agreement on September 4, 2018, for the transfer of Nissha Printing Communications’ business in Tokyo area (market and business foundation, with exceptions, in the Tokyo area; hereinafter, the “Business”) to Kyodo Printing.

Background to Transfer
The Japanese general printing market has been shrinking against a backdrop of stagnating demand and other factors triggered by the diversification of information media. In the light of this market environment, Nissha Printing Communications and Kyodo Printing concluded the business alliance contract and the production consignment contract in March 2016, and have since worked toward constructing a collaborative relationship for the outsourcing of production from Nissha Printing Communications to Kyodo Printing, reorganizing their production system, establishing a quality control system, and streamlining and optimizing procurement activities and distribution operations.
The two companies moved to implement the transfer of the Business based on their collaborative partnership and relationship of trust built from 2016 to the present. As a basic policy, Nissha Printing Communications will reduce its business in the Tokyo area and consolidate its business foundation in the Kansai area as a central field where it can maximize its strength in high-accuracy color reproduction, with Kyodo Printing strengthening the revenue base of its Information Communication business segment. The transfer seeks to appropriately allocate management resources to markets and business domains in which both companies may leverage their assets, and thereby improve business revenues.

Outline of Transfer
  • Nissha Printing Communications will execute an absorption-type split (summary form) of the business into a newly established subsidiary, and as of January 7, 2019, transfer 90% of the issued shares of such subisidiary to Kyodo Printing. Nissha Printing Communications will retain the remaining 10% of the issued shares.
  • The market area covered by the transfer is at present worth about 7 billion yen and about 80% of net sales in the Tokyo area. Nissha Printing Communications will continue to operate in the remaining 20% of its market area.
  • The business foundation covered by the transfer includes Nissha Printing Communications employees (approx. 30) and tangible and intangible assets.

Future Projection
With the conclusion of the share purchase agreement, Nissha Printing Communications will undertake business reorganization with a focus on consolidating its business foundation in the Kansai area. Sales are expected to decline starting in the next fiscal year; however, the company will aim to improve business revenues through measures such as streamlining with the contraction of business in the Tokyo area, integration and closure of factories operated by the subsidiary, and optimization of business in the Kansai area.
The new subsidiary is scheduled to commence operations on January 7, 2019.

Impact on Business Results
The impact of the transfer on Nissha’s consolidated business results in the current fiscal year is expected to be minor.

Outline of Kyodo Printing

Name Kyodo Printing Co., Ltd.
Headquarters 4-14-12 Koishikawa, Bunkyo-ku, Tokyo
Representative Yoshiaki Fujimori, President
Business description Planning, development, production, and sales of publication printing, general commercial printing, business forms, data printing, smart cards, high-function products (packaging, hygroscopic film and adsorption film, etc)
Capital JPY 4,510 million
Established December 26, 1925
Consolidated net sales JPY 100,000 million (FY2019.3 forecast)
Consolidated operating income JPY 2,600 million (FY2019.3 forecast)

Outline of Nissha

Name Nissha Co., Ltd.
Headquarters 3 Mibu Hanai-cho, Nakagyo-ku, Kyoto
Representative Junya Suzuki, Chairman of the Board, President and CEO
Business description Industrial Materials Business Unit (decorative film, metallized paper, others)
Devices Business Unit (touch sensors, gas sensors, others)
Medical Technologies Business Unit (medical electrodes, surgical instruments, other medical devices)
Information and Communication Business Unit (publication printing, commercial printing, others)
Capital JPY 12,119 million
Established December 28, 1946
Consolidated net sales JPY 217,000 million (FY2018.12 forecast)
Consolidated operating income JPY 10,200 million (FY2018.12 forecast)

Outline of Nissha Printing Communications

Name Nissha Printing Communications, Inc.
Headquarters 3 Mibu Hanai-cho, Nakagyo-ku, Kyoto
Representative Shunji Murase, Representative Director
Business description Planning, development, production, and sales of publication printing and commercial printing products and services
Capital JPY 100 million (Nissha Co., Ltd. (90%), Kyodo Printing Co., Ltd.(10%)
Established April 27, 2015
Employees 212 *as of the end of June, 2018
Consolidated net sales 14,500million (FY2018.12 forecast)
(Including Nissha Printing Communications and its subsidiaries Nitec Printing Co., Ltd. and Nissha F8, Inc.)
- The content of the web is information at press time, may change thereafter without notice. Due to risks and uncertainties, predictions may differ from actual results. Please be forewarned.
- "Nissha" is a generic name of Nissha Co., Ltd. and "Nissha Group" is a Nissha Co., Ltd. and its group companies.

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