Columbia Music Entertainment Announces the Acquisition of All Shares of TDK Core Co., Ltd.
September, 28 2007
To Fuel Further Growth, We are Expanding our Visual Content, Enhancing our Education Offerings and Entering the Game Software Business!
Tokyo - Columbia Music Entertainment, Inc. (hereinafter CME; Head Office: Minato-ku, Tokyo; President and Chief Executive Officer (CEO): Sadahiko Hirose, Chairman: Strauss Zelnick) has today announced that it has concluded a share transfer agreement with TDK Corporation (hereinafter TDK; Head Office: Chuo-ku, Tokyo; President: Takehiro Kamigama) to acquire all shares of TDK Core Co., Ltd. (hereinafter TDK Core; Head Office: Chuo-ku, Tokyo; President: Katsumi Sudo)
Details
1. Reason for the Share Acquisition
CME has been steadily improving its profits ever since October 2001, when Ripplewood Holdings (presently RHJ International S.A. ) began its capital participation and installed new management in the Company. We have now decided to acquire a 100% shareholding in TDK Core, which is engaged in the planning, production, and sale not only of music software but also of game and educational software in order to further enhance and diversify CME’s future growth and corporate strategy.
2. Major Effects Expected of Share Acquisition
(1) Synergy effects
We anticipate being able to improve our management efficiency in several respects including by integrating CME and TDK Core’s sales channels, and by reducing production costs.
(2) Expansion of music content
With the addition of TDK Core’s high-quality visual content, such as opera and ballet titles, we will expand the content handled by CME’s Classical Department and strengthen our product lineup.
(3) Reinforcement of education business
By adding TDK Core’s school and learning materials, their sales channels and their intellectual training products, we will expand the sales of the CME Education Department and develop new teaching materials and training products.
(4) Entering new business fields
We will develop new businesses centered on TDK Core’s game software business which has been undergoing remarkable growth.
(5) Responding to visual production needs
In order to effectively respond to the demands for visual production, which are increasing in line with the full digitalization of Japanese television slated for 2011, we will enhance our broadcast media businesses activities and studio services in particular.
From now on, CME will consult actively with TDK Core on the details of our collective business plans.
As described above, CME anticipates further growth and corporate development stemming from both the strategic expansion of our existing business and from the opportunities it will gain to break into wholly new fields of business.
Future Outlook
Concerning the impact of the present acquisition on CME’s consolidated business performance, we are carefully examining TDK Core’s business outlook for the current fiscal term, and we plan to issue a public notice as soon as possible after this matter has been determined.
Outline of the Transaction
1. Outline of the Transferred Subsidiary (TDK Core Co., Ltd)
(1) Business name: TDK Core Co., Ltd
(2) Representative: Katsumi Sudo
(3) Address: 1-9-6 Hacchobori, Chuo-ku, Tokyo
(4) Established: October 29, 1979
(5) Main business details: Planning, production, manufacturing and sales of music software master discs, game software, school teaching materials, and study/education materials-use software
(6) Accounting period: March
(7) No. of employees: 109
(8) Main business premises: Headquarters and Software Department (Chuo-ku, Tokyo), Broadcast Media Department (Minato-ku, Tokyo)
(9) Paid-in capital: 800 million yen
(10) No. of shares issued: 3 million shares
(11) Main shareholder structure and ownership ratio:TDK Corporation, 100%
(12) Recent business performance trends
Term ending March 31, 2006
Term ending March 31, 2007
Sales volume
3,943 million yen
4,094 million yen
Gross profit on sales
1,170 million yen
1,312 million yen
Operating profit
170 million yen
112 million yen
Ordinary profit
138 million yen
96 million yen
Profit for current term
73 million yen
42 million yen
Total assets
2,592 million yen
2,353 million yen
Net assets
1,352 million yen
1,357 million yen
Dividend per share
12.00 yen
7.00 yen
2. No. of Acquired Shares, Value of Acquired Shares, and Shareholding Situation Before and After Acquisition
(1) No. of shares held before current share transfer: 0 shares (shareholding ratio: 0%)
(No. of shares with shareholder voting rights: 0 shares)
(2) No. of shares acquired: 3,000,000 shares (value of shares acquired: 1,500 million yen)
(No. of shares with shareholder voting rights: 3,000,000 shares)
(3) No. of shares held after current share transfer: 3,000,000 shares (shareholding ratio: 1000%)
(No. of shares with shareholder voting rights: 3,000,000 shares)
3. Schedule
September 28, 2007: Decision of the Board of Directors meeting
November 1, 2007: Date of transfer of shares (tentative)
Columbia Music Entertainment Inc.
Company Name: Columbia Music Entertainment Inc.
Address: Roppongi 21 Mori Bldg., 1-4-33 Roppongi, Minato-ku, Tokyo
Representative: Representative Director, President and CEO Sadahiko Hirose
Business contents: Production, advertising and sales of music software, etc., and music artist management
Paid-in capital: 1,000,000,000
URL: www.columbia.co.jp
For further information concerning this subject please contact:
Columbia Music Entertainment, Inc.
PR/ER Group, Strategic Planning Division
Telephone: 03-3588-2250
email: Tomoko Isawa isawa_tomoko@columbia.co.jp
Hideki Nomura nomura_hideki@columbia.co.jp