Original Source Press Release:
Ricoh acquires Pentax digital camera business|
(Friday, July 1, 2011 - 14:06 EDT)
Ricoh Co. Ltd. has agreed to acquire the Pentax camera business from Hoya Corp., in a deal said to be worth some ¥10 billion (~US$124 million), according to Japan's Nikkei newspaper.
The purchase, announced by both companies at a press conference today, will see Tokyo-based Pentax Imaging Systems Co. and its Vietnamese subsidiary Pentax VN Co. Ltd. spun out to a newly created corporation, with all shares in the new entity being transferred to Ricoh.
Ricoh recently announced plans to lay off some 10,000 staff and is currently seeking some 1,600 volunteers for early retirement. With sales of office equipment slowing, the company is looking to expand its consumer presence, and sees a strengthened presence in the camera market as one way to achieve this. For its part, optics company Hoya is aiming to streamline its business, as it invests in opening its first optical glass furnaces outside of Japan, where it has found itself affected by the aftermath of the deadly earthquake and tsunami last March.
Statements from both parties in the deal suggest that Ricoh was attracted by Pentax's interchangeable-lens camera and lens technology, as well as Pentax Imaging Systems' sales channels. Pentax offers a variety of fixed-lens and interchangeable-lens cameras and related accessories, as well as security camera-related products and binoculars. The company's current camera lineup includes the medium format 645D, two K-mount APS-C models (the K-5 and K-r), the recently-announced Pentax Q compact system camera, and a number of fixed-lens models under its Optio brand. Ricoh's existing camera lineup includes the unusual modular GXR system, as well as a number of fixed-lens camera models largely aimed at enthusiast or business use.
A press release issued by Ricoh suggests that it sees each brand's product line as being complementary, with relatively little overlap. No specific information is given as to plans for existing or announced future products from either company, but Ricoh does suggest that it is looking at plans to grow Pentax's security-related products business, to develop value-added services based on use of captured images, and possibly to enter the image archiving business using medium format digital cameras.
Hoya, which acquired Pentax in a 2007 merger, will retain parts of the business responsible for manufacture of digital camera modules, DVD pickup lenses, endoscopes, artificial bones, and voice synthesis. Both companies will have access to the Pentax brandname, with Hoya retaining rights for endoscopes and other products, while Ricoh will begin using the Pentax brand on some of its digital camera products. The deal is expected to close on October 1st, 2011, however the two companies are still working on specifics, including determination as to whether Pentax Europe Imaging Systems S.A.S. or its subsidiaries Pentax Imaging Systems Ltd. and Pentax Imaging Systems GmbH will be part of the transfer.
|Ricoh to acquire HOYA's PENTAX Imaging Systems Business|
Tokyo - July 1, 2011 - Ricoh Company, Ltd. (TSE: 7752; President & CEO: Shiro Kondo; hereinafter referred to as "Ricoh") and HOYA Corporation (TSE: 7741; President & CEO: Hiroshi Suzuki; hereinafter referred to as "HOYA") announced today that the two companies entered into a definitive agreement and concluded a contract regarding the acquisition of HOYA Corporation's PENTAX Imaging Systems Business (hereinafter referred to as "PENTAX Imaging System Business") by Ricoh (hereinafter referred to as "the Acquisition").
On completion of the Acquisition, Ricoh will begin to use the PENTAX brand name for some of its digital camera products, and HOYA will continue to use the PENTAX brand name for their endoscopes and other products.
Furthermore, with the Acquisition, both companies will cooperate with each other to increase the value of the PENTAX brand.
Background of the Acquisition
Currently, Ricoh's core business deals in Imaging Solutions focusing on copiers/multi-function printers, but Ricoh also has a long tradition as a camera manufacturer going back to its establishment in 1936. In 1995, Ricoh became one of the first companies to produce digital cameras. Currently, Ricoh's high-end compact cameras are highly regarded in the market.
Although competition in the digital camera market has intensified, the industry is still growing and there is still tremendous potential for technical innovation and advancement. Ricoh understands the need to bolster its consumer businesses utilizing its strengths in optical and network technologies, and is continually searching for growth opportunities.
Meanwhile, HOYA has been operating the PENTAX Imaging Systems Business, which it acquired from PENTAX Co., Ltd., on March 31st, 2008. In the process of consolidating and streamlining its business portfolio, HOYA decided to offer this business to Ricoh. HOYA will continue to operate its business other than the PENTAX Imaging Systems Business, such as digital camera modules, DVD pick-up lenses, endoscopes, synthetic bone, and voice synthesis software.
PENTAX Imaging Systems Business
Asahi Optical Co., Ltd., the predecessor of PENTAX, developed Japan's first single-lens reflex camera in 1952 and has a long history as a leader in the camera market. The company joined HOYA as a business division in April 2008 and continued to operate as a business thereafter.
The current lineup of products includes medium format, K-mount and Q-mount interchangeable-lens digital cameras, as well as the Optio brand of compact cameras. PENTAX cameras are well known for their superior performance in taking natural-looking photographs. PENTAX maintains high consumer satisfaction ratings with its superb lens technology and enjoys strong support from a solid fan base.
The PENTAX lineup has a mutually complementary relationship and little overlap with the Ricoh brand, which focuses on high-end compact digital cameras.
PENTAX Imaging Systems Business has a security camera lens module on top of the digital camera business, both of which are expected to significantly contribute to Ricoh's opportunities for growth.
Strategic objectives for Ricoh
The goal of the Acquisition is to establish a firmer presence in the consumer business, which has been a considerable challenge for Ricoh.
Ricoh believes that the borderline between office and home will fade and this will be reflected in a major change in products and services. Ricoh aims to provide more consumer--oriented offerings not only in the field of digital cameras but also video conferencing systems, network appliances, and others, to their customers around the world. The Acquisition is the first step in this direction.
Ricoh intends to maximize the synergy from the merger between Ricoh's digital camera business and PENTAX Imaging System Business in various ways.
Strengthening the digital camera business
Creation of new business delivering added value to consumers
The Acquisition will be conducted by HOYA transferring the PENTAX Imaging Systems Business to a newly established subsidiary (hereinafter referred to as "the New Company") through an absorption-type split and business transfer. Ricoh will then acquire 100% of the outstanding shares of the New Company.
The business is expected to be managed as a wholly owned subsidiary of Ricoh after the transfer of management rights.
* Among the European sales companies of the PENTAX Imaging System Business, PENTAX Europe Imaging System S.A.S. (hereinafter "PEIS") is required under applicable laws to consult with its trade unions before transferring the shares of PEIS (or the stocks and equities of PEIS subsidiaries PENTAX Imaging System Limited and PENTAX Imaging System GmbH handling PENTAX Imaging System Business) to the New Company. The final decision as to whether the PEIS shares will be transferred or not will be made after conclusion of said consultation.
Closing date : October 1, 2011 (expected)
Signing date of a definitive agreement : July 1, 2011
Impacts on consolidated financial results of Ricoh and HOYA
Ricoh is aware that the Acquisition will have minor impacts on Ricoh's consolidated financial results in the fiscal year ending March 2012.
As for the effects of this transaction on HOYA's consolidated financial results, please refer to the information disclosed in a timely manner by HOYA to the Tokyo Stock Exchange.
# # #
Notice of Sale of the PENTAX Imaging Systems Business
HOYA Corporation ("HOYA") and Ricoh Company, Ltd. ("Ricoh") hereby announce that pursuant to decisions by the President and CEO of HOYA and Representative Director of Ricoh, respectively, HOYA and Ricoh have executed an agreement as of today to transfer HOYA's PENTAX Imaging Systems Business (the business of developing, manufacturing and selling optical instruments such as digital cameras and replacement lenses, digital camera accessories, security camera-related products, and binoculars) (the "PENTAX Imaging Systems Business") to Ricoh. HOYA will effectuate this transfer by incorporating a new corporation ("NewCo"), cause NewCo to succeed the PENTAX Imaging Systems Business by way of a corporate split (kyushu bunkatsu) (the "Corporate Split"), and transfer all shares of NewCo to Ricoh (such split and transfer shall be referred to as the "Split/Transfer") as of October 1, 2011 (Estimated).
Prior to the Split/Transfer, HOYA intends to transfer its interests in PENTAX VN CO., Ltd., an overseas subsidiary of HOYA in relation to the PENTAX Imaging Systems Business, to NewCo.
Please note, that since the Corporate Split is a simplified corporate split (kan-i kyushu bunkatsu), disclosure items/content have been partially abbreviated.
Further, HOYA will continue to develop its businesses assigned from PENTAX Corporation which was merged (kyushu gappei) into HOYA on March 31, 2008 other than the PENTAX Imaging Systems Business, such as its businesses regarding digital camera modules, DVD pickup lenses, endoscopes, artificial bones, and voice synthesis.
Background of the Split/Transfer
HOYA merged (kyushu gappei) with PENTAX Corporation on March 31, 2008, and has developed the PENTAX Imaging Systems Business assigned from PENTAX Corporation until now. As part of selecting and focusing its management resources, HOYA has decided to cause NewCo to succeed the PENTAX Imaging Systems Business via the Corporate Split, transfer the business and shares, etc. of HOYA's Imaging Systems business subsidiary to NewCo via a business transfer and share/interests transfer, and thereafter, transfer all shares of NewCo to Ricoh.
Ricoh's core business is office solutions focusing on MFPs, Ricoh has also introduced many cameras to the market since its inception in 1936. Ricoh was one of the first manufacturers to launch digital cameras in 1995 and Ricoh's current high-end compact digital cameras are well regarded in the industry.
Now Ricoh aims to establish a consumer business. As a first step to achieve this goal, Ricoh strengthens its camera businesses. Ricoh takes it as an indispensable initiative to obtain the small and lightweight interchangeable lens camera technology, lens technology and sales channels held by the Pentax Imaging Systems Division to pave the way for further advancement and innovations in the digital camera market.
Through this acquisition, Ricoh plans to 1) enhance its digital camera businesses (especially the interchangeable lens camera market which is expected to grow), 2) create value-added businesses for taken photographs (creation and development of value-added services that encourage seeing, storing and refinishing photographs and utilize photographs as communication tools), and 3) expand to other fields (study of entry into the image archiving business using medium-format digital cameras and enhancement of security-related products)
Outline of the Split/Transfer
Timeline for the Split/Transfer
July 1, 2011: Decision by the President to approve the share transfer agreement
July 1, 2011: Execution of the share transfer agreement
Not yet determined: Incorporation date of NewCo
Not yet determined : Decision by the President to approve the corporate split (kyushu bunkatsu) agreement
Not yet determined: Execution of the corporate split (kyushu bunkatsu) agreement
October 1, 2011 (Estimated): Effective date of the Corporate Split
October 1, 2011 (Estimated): Transfer date for NewCo shares
(Note: The Corporate Split satisfies criteria of a simplified corporate split (kan-i kyushu bunkatsu) under Article 784, Section 3 of the Japanese Companies Act. Therefore, it can be effectuated by a decision of the President without obtaining resolution for the approval from a HOYA shareholders meeting.)
Split Method: A corporate split (kyushu bunkatsu), where HOYA will be the split company (bunkatsu kaisha) and NewCo will be the succeeding company (shokei kaisha).
Details of allotment pursuant to split: NewCo will become a wholly-owned subsidiary of HOYA. Therefore, NewCo will not issue shares or make any payments to HOYA pursuant to the Corporate Split.
Decrease of capital pursuant to split: Capital will not be decreased pursuant to a split.
Treatment of stock acquisition rights and convertible bonds: There will be no changes to the treatment of stock acquisition rights. Convertible bonds have not been issued.
Rights and obligations assigned by the succeeding company: Pursuant to the corporate split (kyushu bunkatsu) agreement, NewCo will succeed the assets, debts, agreements, and other rights and obligations held by HOYA in relation to PENTAX Imaging Systems Business as of the end of the immediately preceding day of the effective date of the Company Split. This will not apply to any exceptions as provided in the corporate split (kyushu bunkatsu) agreement.
Likelihood of performing obligations: It is assumed that NewCo will not have any problems performing its obligations after the Company Split.
Outline of the Split Company and Subsidiary to be Transferred
Outline of the parties of the Company Split and the subsidiary to be transferred
|(1) Corporate Name ||HOYA |
|PENTAX Imaging Systems Company |
（Succeeding Company, Subsidiary to be Transferred)
|(2) Business ||Manufacture and sale of electronics-related, image-related, healthcare-related and medically-related products, etc. ||Manufacture and sale of PENTAX Imaging Systems products, etc. |
|(3) Date of incorporation ||August 23, 1944 ||Not yet determined |
|(4) Location of head office ||2-7-5 Nakaochiai, Shijuku-ku, Tokyo ||2-35-7 Maeno-cho, Itabashi-ku, Tokyo |
|(5) Name/position of representative ||Hiroshi Suzuki |
President & CEO
|Not yet determined |
|(6) Capital ||6,264 million yen ||Not yet determined |
|(7) Number of Issued Shares ||435,017,020 shares ||Not yet determined |
|(8) Net assets or Total capital ||377,541 million yen (IFRS) ||Not yet determined |
|(9) Total assets or Gross assets ||578,641 million yen (IFRS) ||Not yet determined |
|(10) Account settlement ||March 31 ||Not yet determined |
|(11) Major shareholders and their respective shareholding ratio ||Japan Trustee Services Bank, Ltd. (Trustee) 6.54% |
J.P. Morgan Chase Bank 380055 5.16%
The Master Trust Bank of Japan (Trustee) 3.64%
State Street Trust and Banking Co., Ltd. 505225 2.41%
Mamoru Yamanaka 2.22%
SSBT OD05 OMNIBUS ACCOUNT -- TREATY CLIENTS 2.20%
Mellon Bank N.A. as agent for its client, Mellon Omnibus U.S. Pension 2.16%
State Street Trust and Banking Co., Ltd. 2.05%
State Street Trust and Banking Co., Ltd. 505223 1.82%
J.P. Morgan Chase Oppenheimer JASDEC Lending Account 1.56%
|HOYA 100.00% |
|(12) Relationship between the listed company and the subsidiary company ||Capital relationship: NewCo is a wholly-owned subsidiary of HOYA |
Personal relationship: Not yet determined
Transactional relationship: Not yet determined
The outline above is applicable as of March 31, 2011 for HOYA (the split company (kyushu bunkatsu kaisha)), and the incorporation date (Estimated) for NewCo.
Items not yet determined as of today will be disclosed when determined.
Outline of other subsidiary to be transferred (as of March 31, 2011)
|(1) Corporate Name ||PENTAX VN CO., Ltd. |
|(2) Business ||Manufacture of PENTAX Imaging Systems products, etc. |
|(3) Date of incorporation ||May 27, 1995 |
|(4) Location of head office ||LOT A7 Sai Dong B |
Industrial Zone, Long Bien District, Hanoi, Vietnam
|(5) Name/position of representative ||Yuichi Kobayashi/General Director |
|(6) Capital ||USD 11,000,000 |
|(7) Number of Issued Shares ||－ |
|(8) Net assets ||361 million yen |
|(9) Total assets ||1,604 million yen |
|(10) Account Settlement ||March 31 |
|(11) Major shareholder(s) and its shareholding ratio ||HOYA 100% |
|(12) Relationship between the listed company and the subsidiary company ||This subsidiary is a wholly-owned subsidiary of HOYA |
Outline of the business department to be split
Business of the department being split: manufacture and sale of PENTAX Imaging Systems products
Items and amount of assets and liabilities to be split (as of March 31, 2011)
|Assets ||Liabilities |
|Item ||Book value ||Item || Book value |
|Current assets ||14,580 million yen ||Current liabilities ||10,198 million yen |
|Non-Current assets ||6,701 million yen ||Non-Current liabilities ||331 million yen |
|Total || 21,281 million yen ||Total ||10,529 million yen |
Situation after company split
Please refer to "3. Outline of the Split Company and Subsidiary to be Transferred" for the corporate name, business, location, name/position of representative, capital, and account settlement of HOYA and NewCo after the Company Split. Ricoh is scheduled to become the sole and major shareholder of NewCo (shareholding ratio: 100.0%) as of the effective date of the Company Split since it is scheduled that HOYA transfer all shares of NewCo to Ricoh on that same date.
Outline of the company to which the shares will be transferred (as of March 31, 2011)
|(1) Corporate Name ||Ricoh Company, Ltd. |
|(2) Date of incorporation ||February 6, 1936 |
|(3) Location of head office ||8-13-1 Ginza, Chuo-ku, Tokyo |
|(4) Name/position of representative ||Shiro Kondo |
President and Corporate Officer
|(5) Capital ||135.3 billion yen |
|(6) Account settlement ||March 31 |
|(7) Business ||Operation such as development, production, sales, service in the area of pictures & solution, industry and other areas |
|(8) Net assets ||982.7 billion yen |
|(9) Total assets ||2,262.3 billion yen |
|(10) Major shareholders and their respective shareholding ratio ||The Master Trust Bank of Japan, Ltd. (Trustee) 8.84% |
Japan Trustee Services Bank, Ltd. (Trustee) 6.37%
Nippon Life Insurance Company 5.07%
The Bank of Tokyo-Mitsubishi UFJ,Ltd. 4.95%
NIPPONKOA Insurance Co., Ltd. 2.51%
THE NEW TECHNOLOGY DEVELOPMENT FOUNDATION 2.18%
SSBT OD05 OMNIBUS ACCOUNT -- TREATY CLIENTS 1.92%
National Mutual Insurance Federation of Agricultural Cooperatives 1.83%
Japan Trustee Services Bank, Ltd. (Trustee 9) 1.60%
Trust & Custody Services Bank, Ltd. 1.59%
|(11) Relationship between the listed company and the subsidiary company ||Capital relationship: None |
Personal relationship: None
Transactional relationship: None
Applicability to the involved parties: None
We currently expect that the effect of the Split/Transfer on HOYA's operations will be minor, however, HOYA will promptly make an announcement if a material effect on the operations of this fiscal year will be expected from here on.
With respect to one of HOYA' European marketing companies for the PENTAX Imaging Systems Business, PENTAX EUROPE IMAGING SYSTEMS S.A.S. ("PEIS"), HOYA will make a final determination on whether or not HOYA will transfer PEIS' shares to NewCo (or interests and shares of PEIS' subsidiaries which conduct PENTAX Imaging Systems Business, PENTAX IMAGING SYSTEMS LIMITED and PENTAX IMAGING SYSTEMS GMBH) upon completing prior negotiations with PEIS' workers counsel as required under applicable laws.