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Benesse Holdings Signs Basic Agreement for Transfer of Shares in Consolidated Subsidiary
Benesse Holdings, Inc.
Release Date : 2010/03/01
Benesse Holdings, Inc. (the Company) today announced that it has signed a Memorandum of Understanding (MOU) regarding the transfer of all shares in wholly owned subsidiary AVIVA Co., Ltd. (Head office: Nagoya, Japan; President: Ryoichi Tanaka; AVIVA) to ThreePro Group Inc. (Head office: Shinjuku-ku, Tokyo; President: Ken Takano; ThreePro). Details of the agreement are found below.
The Company and ThreePro will continue to hold discussions based on the MOU, with plans to finalize and conclude the share transfer at the end of March 2010.
1. Reasons for the Share Transfer
AVIVA, a major operator of PC schools in Japan, joined the Benesse Group in April 2005, following the decision by the Industrial Revitalization Corporation of Japan to provide rehabilitation assistance. Since then, AVIVA has worked vigorously to rebuild its management structure with ongoing support from the Company. Profitability per school has improved thanks to large-scale school closures and mergers. AVIVA has also launched several new ventures, including a corporate training businesses and a merchandise sales business. Synergy effects with the Benesse Group’s existing businesses, however, have not been as forthcoming as initially anticipated. Accordingly, the Company has sought a capital alliance with a partner better able to realize synergies with AVIVA, having determined that business expansion would be difficult for the subsidiary by itself.
ThreePro, known widely as a “market creation supporter,” offers a variety of PC-related products and services. In addition, the company delivers a range of high-added-value services tailored to business scenarios across Japan to corporate and individual customers through a network of 95,000 agents. ThreePro, through alliances in the education industry, also creates learning opportunities aimed at skill enhancement, and assists jobseekers in efforts to find employment, change jobs, or advance their careers.
The Company has vigorously supported efforts to identify a partner for AVIVA. After negotiations with numerous candidates, the Company has determined that an improved capacity to draw more customers through a more robust relationship with ThreePro would contribute best to stabilizing AVIVA’s operating performance and promoting future growth. This recognition prompted the signing of a MOU for the eventual transfer of all shares held in AVIVA by the Company to ThreePro.
2. Overview of Subsidiary to Be Transferred
Name: AVIVA Co., Ltd.
Head office: 1-10-29 Marunouchi, Naka-ku, Nagoya-shi, Aichi Prefecture
Representative: Ryoichi Tanaka, President
Establishment date: October 25, 2001
Capital: 250,000,000 yen (100% investment, Benesse Holdings, Inc.)
Business lines: Operation of “AVIVA” brand PC schools
Net sales: 8.1 billion yen (Fiscal year ended March 31, 2009)
3. Overview of Share Transferee
Name: ThreePro Group Inc.
Head office: 7-21-3 Nishishinjuku, Shinjuku-ku, Tokyo, Japan
Representative: Ken Takano, President
Establishment date: April 1, 1996
Capital: 1,002,600,000 yen
Business lines: ThreePro has competitive advantages in IT-related business support. Viewing its corporate identity as that of a “market creation supporter,” the company supports the development of markets in all industries, not only in IT. ThreePro serves as a holding company that manages a corporate group consisting of 15 companies.
Net sales: 10 billion yen (Fiscal year ended October 31, 2009)
4. Number of Shares Scheduled for Transfer; Pre- and Post-Transfer Shareholding of Benesse Holdings
(1) Number of shares held prior to transfer: 10,000 shares (100%)
(2) Number of shares scheduled for transfer: 10,000 shares
(3) Number of shares held after transfer: 0 shares (0%)
5. Schedule
March 1, 2010 Signing of MOU
March 30, 2010 (tentative) Signing of share transfer agreement
6. Outlook (Impact on Operating Results)
Negotiations regarding the final terms and conditions of the share transfer are ongoing. Accordingly, the impact of this transfer on consolidated operating results for the current fiscal year cannot be determined at this time. Any relevant announcement, if necessary, will be made once details have been finalized. Negotiations are proceeding with the assumption that the Company will waive any claims to loans receivable to AVIVA. However, the amount of such loan waivers should be within the scope of existing allowances for doubtful receivables and for losses on support to affiliated companies.
The Company and ThreePro will continue to hold discussions based on the MOU, with plans to finalize and conclude the share transfer at the end of March 2010.
1. Reasons for the Share Transfer
AVIVA, a major operator of PC schools in Japan, joined the Benesse Group in April 2005, following the decision by the Industrial Revitalization Corporation of Japan to provide rehabilitation assistance. Since then, AVIVA has worked vigorously to rebuild its management structure with ongoing support from the Company. Profitability per school has improved thanks to large-scale school closures and mergers. AVIVA has also launched several new ventures, including a corporate training businesses and a merchandise sales business. Synergy effects with the Benesse Group’s existing businesses, however, have not been as forthcoming as initially anticipated. Accordingly, the Company has sought a capital alliance with a partner better able to realize synergies with AVIVA, having determined that business expansion would be difficult for the subsidiary by itself.
ThreePro, known widely as a “market creation supporter,” offers a variety of PC-related products and services. In addition, the company delivers a range of high-added-value services tailored to business scenarios across Japan to corporate and individual customers through a network of 95,000 agents. ThreePro, through alliances in the education industry, also creates learning opportunities aimed at skill enhancement, and assists jobseekers in efforts to find employment, change jobs, or advance their careers.
The Company has vigorously supported efforts to identify a partner for AVIVA. After negotiations with numerous candidates, the Company has determined that an improved capacity to draw more customers through a more robust relationship with ThreePro would contribute best to stabilizing AVIVA’s operating performance and promoting future growth. This recognition prompted the signing of a MOU for the eventual transfer of all shares held in AVIVA by the Company to ThreePro.
2. Overview of Subsidiary to Be Transferred
Name: AVIVA Co., Ltd.
Head office: 1-10-29 Marunouchi, Naka-ku, Nagoya-shi, Aichi Prefecture
Representative: Ryoichi Tanaka, President
Establishment date: October 25, 2001
Capital: 250,000,000 yen (100% investment, Benesse Holdings, Inc.)
Business lines: Operation of “AVIVA” brand PC schools
Net sales: 8.1 billion yen (Fiscal year ended March 31, 2009)
3. Overview of Share Transferee
Name: ThreePro Group Inc.
Head office: 7-21-3 Nishishinjuku, Shinjuku-ku, Tokyo, Japan
Representative: Ken Takano, President
Establishment date: April 1, 1996
Capital: 1,002,600,000 yen
Business lines: ThreePro has competitive advantages in IT-related business support. Viewing its corporate identity as that of a “market creation supporter,” the company supports the development of markets in all industries, not only in IT. ThreePro serves as a holding company that manages a corporate group consisting of 15 companies.
Net sales: 10 billion yen (Fiscal year ended October 31, 2009)
4. Number of Shares Scheduled for Transfer; Pre- and Post-Transfer Shareholding of Benesse Holdings
(1) Number of shares held prior to transfer: 10,000 shares (100%)
(2) Number of shares scheduled for transfer: 10,000 shares
(3) Number of shares held after transfer: 0 shares (0%)
5. Schedule
March 1, 2010 Signing of MOU
March 30, 2010 (tentative) Signing of share transfer agreement
6. Outlook (Impact on Operating Results)
Negotiations regarding the final terms and conditions of the share transfer are ongoing. Accordingly, the impact of this transfer on consolidated operating results for the current fiscal year cannot be determined at this time. Any relevant announcement, if necessary, will be made once details have been finalized. Negotiations are proceeding with the assumption that the Company will waive any claims to loans receivable to AVIVA. However, the amount of such loan waivers should be within the scope of existing allowances for doubtful receivables and for losses on support to affiliated companies.