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ORIX CORPORATION

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ORIX : Notice of Transfer of Sub-Subsidiary (Transfer of Shares) and Recording of Extraordinary Gain (Gain on Sale of Shares of Subsidiary)

12/17/2021 | 01:49am EDT

December 17, 2021

ORIX Corporation

(TSE Ticker: 8591 JP)

Notice of Transfer of Sub-Subsidiary (Transfer of Shares) and Recording of Extraordinary Gain (Gain on Sale of Shares of Subsidiary)

ORIX Corporation ("ORIX") announced today that ORIX has decided to transfer all of the shares (the "Share Transfer") in Yayoi Business Preparation Co., Ltd. ("New Yayoi") held by Yayoi Co., Ltd., our consolidated subsidiary ("Yayoi"), to an investment purpose company held by an investment fund managed by Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates and its related entities, "KKR"). Prior to the Share Transfer, Yayoi plans to transfer all of Yayoi's business, including development, sales and support of business software and related services (the "Business") through an absorption-type company split to New Yayoi (the "Company Split", together with the Share Transfer, the "Transaction"). As a consequence, the company name of New Yayoi will be changed to Yayoi Co., Ltd.

1.Reasons for the Transaction

Yayoi, a software service company with a vision of being a "concierge for business", develops and provides business software "Yayoi Series" and "Business and Operational Support Services" that supports business operators to solve problems for SMEs, sole proprietors, and entrepreneurs. The Yayoi Series has been No.1 in number of users of cloud accounting software for six consecutive years and No.1 for sales of desktop business software for twenty-two consecutive years, with over 2.5 million registered users. In the Business and Operational Support Services segment, Yayoi provides services that transcend the boundaries of business software, through supporting startups, becoming operational, financing, etc. Yayoi continues to expand its customer base based on the high development capabilities and brand power it has cultivated since its establishment in 1978. In addition, since 2020, Yayoi has been involved in activities aimed at realizing operational efficiency for business operators, such as participating in the launch of the "Social Systems and Digitization Study Group" and the "E-Invoice Promotion Association", aimed at promoting digitalization across society as a whole.

Founded in 1976, KKR is one of the world's leading diversified asset management companies

and is listed on the New York Stock Exchange. As of the end of September 2020, it had 459 billion dollars (approximately 52 trillion yen) of assets under management and has handled approximately 330 private equity investments to date. In particular, KKR has strong expertise investing in and supporting the success of technology and software businesses globally, including companies focused on accounting and business solutions to SMEs. In the accounting and business software area for SMEs, KKR has a track record of investing in companies such as MYOB in Australia, Exact in the Netherlands, Visma in Norway/Scandinavia, and KiotViet in Vietnam. In terms of enterprise software and cloud / SaaS solutions, KKR has invested globally in a range of companies such as Epicor, an ERP vendor in the United States; OneStream, a cloud financial accounting platform in the United States; SoftwareOne, an integrated business software and cloud solution in Switzerland; and dataX, the developer of the marketing tool b-dash in Japan.

Since the acquisition of Yayoi's shares in December 2014, ORIX has worked together with Yayoi's management to expand Yayoi's business by leveraging ORIX's financial know-how and human resources. Yayoi now has more than 2.5 million registered users, up from 1.25 million since our acquiring Yayoi, making it a dominant leader in the software services market for domestic small business operators. On the other hand, as the business environment surrounding Yayoi changes at an accelerating pace, such as the digitization of society and the spread of cloud software, ORIX has repeatedly held discussions with Yayoi's management regarding Yayoi's strategies for further growth, including future capital policies. Consequently, ORIX has determined that Yayoi would be able to grow more dynamically in anticipation of the promotion of SaaS transformation, industry reorganization, and other such changes, by welcoming KKR, which is one of the world's leading private equity funds and possesses a wealth of experience, knowledge, and global networks in the business software services market, as a new sponsor of Yayoi, and has thus decided on the Share Transfer.

2.Outline of subsidiary

(1)

Name

Yayoi Co., Ltd.

(2)

Location

Akihabara UDX, 4-14-1, Sotokanda, Chiyoda-ku, Tokyo

(3)

Name and title

of

Koichiro Okamoto, President & CEO

representative

(4)

Description

of

Development, sales and support of business software and related

Businesses

services.

Provision of business support services to support startups and

financing.

(5)

Share capital

150 million yen

3.Outline of sub-subsidiary to be transferred

(1)

Name

Yayoi Business Preparation Co., Ltd.

(2)

Location

Akihabara UDX, 4-14-1, Sotokanda, Chiyoda-ku, Tokyo

(3)

Name

and title

of

Koichiro Okamoto, President & CEO

representative

(4)

Description

of

Development, sales and support of business software and related

Businesses

services.

Provision of business support services to support startups and

financing. (Note 1)

(5)

Share capital

3 million yen

(6)

Date

of

December 10, 2021

establishment

(7)

Major

shareholders

Yayoi Co., Ltd. (100%)

and

shareholding

ratio

(8)

Relationship

Capital

ORIX's subsidiary, Yayoi (99.9% voting rights held

between

the listed

relationship

by ORIX), owns 100% of the shares.

company

and

the

Personnel

Not applicable.

sub-subsidiary

relationship

Business

There is no material business relationship with

relationship

ORIX.

(9)

New Yayoi Operating results and financial position for the past three years (Note 2)

For reference: Yayoi Operating results and financial position for the past three years

Unit: Millions of Japanese yen

Period ended September

Period ended September

Period ended September

2019

2020

2021

Net Assets

17,981

12,797

8,722

Total Assets

41,499

36,373

35,973

Net Sales

19,373

20,235

21,193

Ordinary Income

5,861

5,506

4,937

(Note 1) New Yayoi will carry out the business transferred through the Company Split. (Note 2) Since New Yayoi is a company established on December 10, 2021, there is no final business year that has been finalized. New Yayoi will succeed all assets and liabilities of Yayoi (excluding borrowings from financial institutions, cash and deposits, and taxes and public dues that cannot be succeeded due to a company split by law exceeding a certain amount) based on the balance sheet on the day before the effective date of the Company Split.

4.Outline of buyer (planned)

(1)

Name

YYK Investment K.K. (planned)

(2)

Location

11F, Meiji Yasuda Seimei Building, 2-1-1 Marunouchi, Chiyoda-ku,

Tokyo (planned)

Relationship

(3)

between the

listed

There are no capital relationships, personal relationships or business

company

and

relationships to be stated between ORIX and the relevant company.

applicable company

5.Number of shares to be transferred, transfer price and status of shares held before and

after transfer

Number of shares

3,001 shares (planned)

(1)

held before

the

(Number of voting rights: 3,001 (planned))

transfer

(Percentage of voting rights: 100%)

Number of shares

3,001 shares (planned)

(2)

(Number of voting rights: 3,001(planned))

to be transferred

(Percentage of voting rights: 100%)

The transfer price is not disclosed due to the confidentiality

obligation in the definitive agreement for the Transaction.

The transfer price was determined by comprehensively

(3)

Transfer price

considering negotiations with counterparties that have

undergone a fair process, Yayoi's most recent business

performance and business conditions, and future

performance outlook, etc., and we recognized it as the fair

price.

Number of shares

0 shares

(4)

held

after the

(Number of voting rights: 0 rights) (Percentage of voting

transfer

rights: 0%)

6.Schedule of the Transaction

(1)

The

date

of

conclusion

of

the

definitive

December 17, 2021

agreement

for

the

Transaction

(2)

Date of conclusion

of the

absorption-

type company split

December 17, 2021

agreement

for

the

Company Split

(3)

Effective

date

of

March 1, 2022 (planned)

the Company Split

(4)

Effective

date

of

March 1, 2022 (planned)

the Share Transfer

7. Outlook

As a result of the Transaction, we expect to record a gain of 163.2 billion yen on the sale of shares of the subsidiary in the fourth quarter consolidated financial results. Regarding revisions to consolidated earnings forecasts, dividend forecasts, and other details, please refer to the "Notice Regarding Revision of Consolidated Earnings Forecast and Dividend Forecast for the Fiscal Year Ending March 31, 2022" disclosed at the same time today.

Contact Information:

Investor Relations and Sustainability Department

ORIX Corporation

Tel: +81-3-3435-3121

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

ORIX Corporation published this content on 17 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 December 2021 06:48:05 UTC.


© Publicnow 2021
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