28 September 2001
Company: Information Services International - Dentsu, Ltd.
(ISID)
Representative: Jutaro Takinami, President & CEO
(Code: 4812, TSE, 1st Section)
Contact: Yutaka Kimura, Senior Executive Director
(Tel.: 03-3228-6160)
Acquisition of Shares in KEICHO, Ltd.
(to be ISID Subsidiary)
International Information Services - DENTSU Co. Ltd. (abbreviated name: ISID, representative: Jutaro TAKINAMI) at its meeting of the board of directors on 28 September 2001, acquired 66.1% of the total number of issued shares in KEICHO, Ltd. (abbreviated name: KEICHO) and ISID hereby gives notice that it will make KEICHO a subsidiary. Previously, ISID held 8.1% of KEICHO's issued shares. Now as well as converting KEICHO's convertible debentures (percentage of total number of issued shares after conversion 51.1%) into shares, and increasing the percentage of shares held to 66.1%. At the same time, Mr. Akihiro Fukuyama, who was an executive director of Keicho, was promoted to the position of president & CEO, also two directors were newly assigned from ISID. KEICHO, now as a member of the ISID group, will further increase the value of the company.
KEICHO was established in 1971. The computer division of the Economic Research Association Incorporated became a foundation of the company, and the company was involved in systems development, centre operation, application package development/sales for mainly large financial institutions and public organizations. KEICHO's turnover for the March 2001 quarter was JP¥4,380 million and recurring profit of JP¥25 million.
ISID has been dealing with KEICHO for a while, mainly with systems development business for financial institutions and the DENTSU Group, evaluating their systems development ability very favourably. In February last year, to further strengthen the relationship, ISID acquired 8.1% of KEICHO's shares and underwrote its convertible debentures.
By making KEICHO an ISID subsidiary, ISID plans:
- to maintain a strong and stable place for approximately 400 personnel in the areas of system development / maintenance / operational support based on new technology.
- to reserve systems development technology and know-how within the group.
ISID supplements its managerial resources by active partnerships with other companies, and its strategy is based around providing a total solution for customers. Making KEICHO a subsidiary is in line with this strategy. ISID now plans to keep on strengthening the group's strategy, aiming for diversification and value-adding to IT solutions.
[Overview of KEICHO, Ltd.]
(1) Trading Name: KEICHO, Ltd.
(2) Representative: Akihiro Fukuyama
(3) Address: Koto-ku, Tokyo
(4) URL: www.keicho.co.jp
(5) Established: October 1971
(6) Main business:
• Software development
• Systems / network etc. operational services
(7) Settlement of accounts: End of March
(8) Number of employees: 416 (at July 2001)
(9) Main business locations: Omiya Technical Centre,
Nishi-Ochiai office, Sapporo office, Fukuoka office
[Status of shares held before and after exercise of right of conversion and additional acquisition]
Number of shares held previously: 26,000
(percentage of total number of 320,000 issued shares: 8.1%)
Number of shares acquired by exercise of right of conversion: 333,333
(percentage of total number of 653,333 issued shares after conversion:
51.1%)
Number of additional shares: 72,700
(percentage of total number of 653,333 issued shares after conversion:
11.1%)
Number of shares ultimately held by ISID: 432,033
(percentage of total number of 653,333 issued shares after conversion:
66.1%)
[Schedule]
28 September 2001: Board of Directors decision
Same day: Exercise of right of conversion and additional acquisition
of shares
[Forecast for the future]
It is predicted that business results for KEICHO for the second half of the year, which will be consolidated with ISID's, will be turnover of approximately ¥2.8 billion and recurring profit of approximately ¥200 million.
A forecast for ISID's business results on consolidated basis for this
fiscal year will be announced later as soon as it becomes clear.
